Third Party Syndication Platforms Offer Time and Cost Savings
Global syndicated loan volumes are expected to grow 6% per annum from 2013, according to an exclusive survey of market participants commissioned by Debtdomain. The survey also found a growing desire to create efficiencies by combining syndication deal sites with a CRM.
The survey, carried out by Oliver Wyman, finds that despite falls in other regions, the US market is expected to remain strong during this period. An improving economy and the better funding position of banks are key factors.
GDP growth and infrastructure spending should also contribute to emerging market growth. Other contributors include:
- Continued demand for general corporate facilities
- Corporate acquisitions should benefit from 8% CAGR as economic recovery opens the way for M&A
- Sustained refinancing requirements as existing loans mature
The survey also found that banks are increasingly using third party platforms to create internal efficiencies. Third party platforms for syndications are now common in the Americas and EMEA, with use growing in APAC. Users of third party systems name increased functionality and network benefits for bookrunners as key reasons for their use.
The survey also finds that more than 50% of participating banks are using a combined syndication platform and CRM, benefiting from cost and time savings. Regulation, compliance and improved functionality were also cited as drivers for increased use of third party platforms, with investment in internal systems, such as CRMs, unlikely in the current environment.
"The survey is a validation of the medium-term health of the syndicated loans market.
While there is clearly some weakened demand globally, banks are using this time wisely.
Streamlining syndicated loan front office systems by combining deal sites with a best in class CRM will ensure that banks are ready to capitalize on the anticipated recovery in 2013," said David Levy, co-CEO, Debtdomain.
About this survey
The survey was carried out by Oliver Wyman in early 2012. Respondents consisted of senior bankers globally. Sample job titles included Managing Director and Global Head of Syndications. Respondents included clients and non-clients of Debtdomain.