Syndicated loan recovery scotches disintermediation theory

Last year’s dramatic reduction in syndicated loan volumes in Europe was viewed in some quarters as part of a broader trend away from loan financing by borrowers. But with plenty of large corporates raising capital via the loan market in recent months, has the disintermediation theory been overplayed?

Reports of the demise of the loan market, it seems, have been greatly exaggerated. At the beginning of 2010 it looked as though a significant and long-term structural shift had occurred in European corporate funding, involving a move away from bank lending towards wholesale debt markets.

In an article in this magazine in February (“A shift in the balance of power”, Credit February 2010, pp. 32–35), there was no shortage of bankers suggesting the move was permanent, pointing to the fact that