Goldman Steps Up Middle-Market Efforts

Goldman Sachs is taking the plunge into middle-market lending and has added up to six v.p.s to its lending group through internal moves and hiring, according to Corporate Financing Week, an LMW sister publication.

  • 11 Jun 2004
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Goldman Sachs is taking the plunge into middle-market lending and has added up to six v.p.s to its lending group through internal moves and hiring, according to Corporate Financing Week, an LMW sister publication. A private-equity dealmaker who has spoken to Goldman executives about the firm's strategy said its bankers have been instructed to strengthen their efforts to finance deals of less than $200 million.

Middle-market lending has become increasingly popular in the past 18 months among investment banks keen to keep deal flow moving (LMW, 1/19). In the past, middle-market loans were dominated by commercial banks and specialty finance companies. Buyside accounts have been more active buyers of the loans and some money managers, such as GoldenTree Asset Management, have announced funds to target this area directly. Recently a plethora of private equity firms have announced plans to raise Business Development Companies that lend to and make mezzanine investments in the middle market.

Despite the more crowded space, Goldman executives still believe the middle market has some advantages over blockbuster deals, said a senior dealmaker. If the firm underwrites a $150 million term loan on its own, it can earn 2.5%--a $3.75 million fee. But on a bigger deal, where the competition for the lead is greater, Goldman's fee gets squeezed to 1.75%. On a $600 million deal, that's $10.5 million. If there are three underwriters on the deal, Goldman's share of that $10.5 million becomes $3.5 million. Big ticket deals are more time-consuming, as they typically involve numerous four-way conference calls so that all the underwriters can be involved. A Goldman spokeswoman did not return calls.

  • 11 Jun 2004

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Share % by Volume
1 Societe Generale 16.10
2 Rabobank 15.11
3 Barclays 9.42
4 Credit Agricole 7.93
5 Morgan Stanley 7.46

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
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1 Wells Fargo Securities 11,897.40 33 11.83%
2 Bank of America Merrill Lynch 9,837.56 29 9.78%
3 Citi 9,714.54 32 9.66%
4 JPMorgan 7,997.38 24 7.95%
5 Credit Suisse 6,335.67 14 6.30%