Looking over the horizon (TT JanFeb06 p22-24)

The Western European syndicated loan market again enjoyed a record year in 2005, with a sustained increase over the course of the year resulting in an estimated 1,500 transactions – representing a 10% rise on 2004. Volumes also rose sharply to $1.21bn (as at 12 December 2005).

The UK market, however, shows a slight decline in transaction numbers and a sharper decline in volumes from first to second half. This indicates that most viable refinancings have now taken place in the UK, with the European market likely to follow a similar pattern in 2006. An increased focus on returns should make banks think twice about very narrow margins, as has already been seen in a flattening of the pricing curve.