The syndicated loan market used to be the poor relation of the investment banking community. Considered a small step up from straightforward corporate banking, syndicated loan specialists were scorned by most investment bankers, who felt their lines of business were more sophisticated, more lucrative and far more exciting. But times have changed. The syndicated loan market has taken off in recent years and in 2006, global volumes reached nearly £3500bn, including just under $1300bn of European deals.
The market has doubled in size over the past six years and the shift has been driven primarily by an increase in corporate takeovers, private equity transactions and infrastructure deals. In 2004, more than 70% of loans were corporate refinancings. By last year, that figure had dropped to 43%, while 48% of deals related to mergers and acquisitions (M&A) activity of one kind or another.
