Recent figures from Reuters’ Loan Pricing Corporation show that borrowers have it better in the US now than ever before. Strong growth in the M&A market meant that syndicated loan issuance in the US reached the highest volume on record in the first quarter of the year.
Loans backing mergers and acquisitions reached $127 billion, up from $45 billion one year ago. Meanwhile loan margins fell across the credit spectrum, even in the riskier end of the market now commonly bought by hedge funds, mutual funds and CLO vehicles. In 2002, a loan to a BB-rated company would cost it 3.6% over Libor; last quarter it would only cost 1.6% over Libor.