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Debt Market Update Q2 2017

Debt Market Update Q2 2017

The first half of the calendar year experienced an increase of 29 percent in syndicated loan market volume to US$32.6 billion compared to the first half of 2016. Q2 2017 was the better performer of the two quarters, with a 62 percent increase in volumes to US$23 billion, representing an increase of US$8.8 billion compared to the corresponding period last year.


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Debt Market Update

An increase in M&A activity within the Australian public sector, certain large mining and oil and gas refinancing(s) have been the key drivers for the increase in syndicated loan volume within the Australian bank market.

Key themes

  • Australian bank debt market – Large scale privatisations boost overall syndicated loan volumes for H1 2017.
  • A$ medium term note market – Improved conditions for issuers has driven a two fold increase in volume in Q2 2017. 
  • Positive outlook for the rest of 2017, with smaller event driven financing and refinancing(s) to dominate following the wake of the privatisation funding.

Notable transactions

Notable transactions for the quarter include:

  • The partial privatisation of Endeavour Energy, NSW’s largest electrical distribution network, through a Macquarie Group led-consortium.
  • French oil company Total SA completed a US$3.0 billion borrowing, the majority of which refinances part of a larger US$20 billion project financing completed for its Ichthys LNG project a few years ago.
  • Approximately 12 lenders clubbed a A$1.62 billion (circa US$1.2 billionn) loan to finance the A$2.6 billion acquisition of New South Wales land registration agency by Hastings Funds Management and First State Super.
  • Australian national carrier Qantas Airways Ltd increased its three and four-year refinancing to A$900 million (US$678 million) from an initial A$850 million target.
Australian syndicated loan volume (US$billion)
Australian syndicated loan volume (US$billion) chart

Source: Loan Connector (data extracted July 2017) and KPMG Analysis

Australian syndicated loan volume, LTM by sector (US$ billion)
Australian syndicated loan volume, LTM by sector

Source: KangaNews, S&P CapitalIQ (data extracted July 2017) and KPMG Analysis. Note: Criteria has changed, new criteria excludes Financials and Government

Debt Market Quarterly Update

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