Debt Market Update: Q3 2016

Debt Market Update: Q3 2016

The first three calendar quarters of 2016 experienced a drop of 29 percent in syndicated loan market volume to US$40.7b compared to the corresponding period last year. Q3 2016 fared the worst, with a 46 percent drop in volumes to US$11.1b and the number of completed deals declined by 53 percent compared to the corresponding period last year.

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Timing of the corporate refinancing cycle, subdued M&A environment and lower capital expenditure have driven the reduced volume in the market.

Key themes

  • Australian bank debt market – lack of refinancing activity and the subdued M&A environment results in large drop in volumes.
  • Australian bond market – recovery in Q3 2016 issuances however year-to-date volumes remain weak.
  • US private placement market – demand for Australian issuers continue with new to market transactions in the utility sector.

Australian syndicated loan volume

Source: Loan Connector (data extracted October 2016), KPMG Analysis

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

Source: Loan Connector (data extracted October 2016), KPMG Analysis

Debt Market Quarterly Update

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