Global and political risks continue to be the single-greatest influence on the syndicated loan market. Multiple important elections will occur this year, with more than two billion people across 50 countries expected to go to the polls. Meanwhile, ongoing wars in Europe and the Middle East, simmering geopolitical tensions and a slower global economic outlook are likely to be the principal causes of greater uncertainty in financial markets. These factors may act as a barrier to the growth of the global syndicated loan markets this year. Against this backdrop, we set out our predictions for the syndicated loan market in 2024.
Driven largely by challenging macroeconomic conditions, particularly interest rate headwinds, a growing number of transactions were defined by the complexity of their capital structures in 2023. Financial institutions (both banks and private debt providers) were tasked with navigating various combinations of debt and quasi-debt instruments, seniority positions (and associated intercreditor issues) and interest payment mechanics, coming together within a single capital structure to fund specific transaction purposes.
