Tuesday, February 25, 2014

Thomson Reuters Syndicated Loans Review – Syndicated Loan Markets are up again!

Every quarter, Thomson Reuters publishes data of syndicated loans granted by banks worldwide. The company namely provides separate proceeds and fees data by bookrunner and mandated arranger as well as the number of deals.

The analysis of the Q4 2013 data shows that syndicated loan markets are on the rise again.




Bookrunner Proceeds

Industry Total

In 2013, total syndicated loan proceeds have increased, in any quarter, by roughly 25 %.

Over the entire financial year 2013, the major U.S. banks have increased their proceeds by 28 %. This evolution is even more spectacular for the leading European banks whose syndicated loan proceeds have increased by 68 %. In absolute terms, however, U.S. banks still generated almost 2/3 more proceeds in 2013 than their European counterparts.

The proceeds of the three major Japanese banks almost stagnated in 2012. Compared to 2012, they have experienced only a slight increase by 1 %. This means that, today, European players generate twice as much syndicated loan proceeds than the big Japanese players.

Finally, the market for bookrunners has slightly concentrated, as the proceeds of the top 25 banks have increased from 28 % in 2012 to 31 % in 2013.


Regional Players

In France, BNP Paribas is, today, the clear market leader: It generates twice as many proceeds as its rivals Crédit Agricole and Société Générale together.

The picture is roughly the same in the U.K., where Barclays earns almost twice the proceeds earned by its competitors HSBC and RBS.

The bookrunner market in Japan is more balanced: Mitsubishi UFJ (41 %), Mizuho (34 %), and Sumitomo Mitsui (25 %) divide the proceeds among themselves.

In the U.S., the market leaders are JP Morgan and Bank of America with 30 % and 27 % market share, respectively.




Bookrunner Fees

Industry Total

Comparing 2012 with 2013 figures, total bookrunner fees have increased, in any quarter, by roughly 25 %.

European banks have experienced the most spectacular increase (45 %) of bookrunner fees in 2013. The main U.S. and Japanese banks have increased their bookrunner fees by 22 % and 24 % respectively.

However, the biggest chunk of bookrunner fees still goes to the big U.S. players: They generate 33 % of the industry total in 2013, whereas European and Japanese banks generate 23 % and 8 % respectively.

As is the case for bookrunner proceeds, the bookrunner fee market is slightly more concentrated in 2013, compared to 2012: The share of the top 25 banks increased from 37 % in 2012 to 42 % in 2013.

Regional Players

The clear market leader in France is BNP Paribas. The bank generates twice as many bookrunner fees as its rivals Crédit Agricole or Société Générale together.

The situation is comparable to the U.K. where Barclays dominates the market and generates slightly more than twice the fees generated by its closest rivals HSBC or RBS.

The situation in Japan is more balanced: In 2013, Mitsubishi UFJ holds 41 %, Mizuho 32 %, and Sumitomo Mitsui 26 % market share.

In the U.S., the market leaders are JP Morgan and Bank of America. They both have 26 % market share in 2013.
Mandated Arranger Proceeds

Industry total

In 2013, mandated arranger proceeds have increased by 31 %. Big U.S. banks have raised their proceeds by 35 % and the major European players by 54 %. The proceeds of Japanese banks remained stable (1 % increase).

In both 2012 and 2013, the market share of the top 25 mandated arrangers remained stable at 70 %.


Regional players

In France, BNP Paribas is the major mandated arranger with 51 % market share. Crédit Agricole and Société Générale have only 28 % and 22 % market share, respectively.

In the U.K., Barclays holds 44 % market share, followed by HSBC and RBS with 28 % market share each.

The U.S. market is dominated by JP Morgan (26 %) and Bank of America (25 %), followed by Citi (16 %) and Wells Fargo (14 %).

In Japan, Mitsubishi UJF generates 42 % of mandated arranger proceeds, whereas Mizuho and Sumitomo Mitsui achieve 31 % and 27 %, respectively.

Mandated Arranger Fees

Industry total

Since 2012, mandated arranger fees have increased by 43 %. On a regional basis, the fees of big U.S. banks increased by 23 %, the fees of the main European players increased by 40 %, and the fees of Japanese banks increased only slightly by 2 %.

The market is more concentrated in 2013, compared to 2012: The top 25 players have increased their market share from 18 % to 31 %.


Regional players

The main French mandated arranger is BNP Paribas (51 % market share), followed by Crédit Agricole (28 %) and Société Générale (21 %).

In the United Kingdom, Barclays dominates the market with 51 % market share. HSBC and RBS generate 25 % and 24 % of the fees, respectively.

Bank of America (27 %) and JP Morgan (25 %) are the major players in the U.S., followed by Wells Fargo (13 %), Citi (12 %) and Goldman Sachs (10 %).

On the Japanese market, Mitsubishi UJF has 41 % market share, Mizuho 31 %, and Sumitomo Mitsui 28 %.


Mandated Arrangers Deals

Top 25

In 2013, the number of deals of the top 25 mandated arrangers has increased by 20 %.

U.S. banks show the highest deal flow: In 2013, Bank of America closed 1,754 deals, JP Morgan 1,592 deals, and Wells Fargo 1,294 deals.

Regional players

The main U.S. players are Bank of America (27 %), JP Morgan (24 %), and Wells Fargo (20 %).

In the U.K., three banks divide the number of deals evenly among themselves: Barclays accounts for 33 %, HSBC for 33 %, and for RBS 34 %.

In France, BNP Paribas closed 45 % of the deals, Crédit Agricole 30 %, and Société Générale 25 %.

The major Japanese player is Mitsubishi UFJ (42 % closed deals), followed by Sumitomo Mitsui (31 %) and Mizuho (27 %).


Additional visualizations of the data are available here.


Resource:

Thomson Reuters Global Syndicated Loans Review – Last update Q4 2013