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Napkin waving shows loan market’s passion

If the atmosphere at GlobalCapital’s annual Syndicated Loan and Leveraged Finance Dinner can be taken as any kind of barometer, then the loan market going into 2015 is in rude health.

Wednesday evening saw a big crowd gather in London’s Guildhall for the event, demonstrating the loan market’s growing confidence and regained swagger.

While our choice of singing waiters as entertainment was intended to fire up some passion — French, Italian, German or otherwise — we needn’t have worried. From a room full of swirling napkins and rousing chorus to the magnanimous cheers that greeted each of this year’s award winners, it was clear that passion was available in abundance.

And it’s not hard to see why. For all the challenges of 2014 it was a great year for loans. Total European corporate loan volume was $1tr — up 34% on 2013 — and the highest total since 2007, according to Dealogic. With M&A expected to return in force this year, 2015 could even set a new record.

Back in 2004 when GlobalCapital – in its previous incarnation EuroWeek – started the loan market dinner, the annual volume of European loans weighed in at $671bn. 

The most pleasing aspect of Wednesday night was just how much those in the loan market have come to regard this dinner as their own and how at home everyone was. It was gratifying to hear one senior loans banker opine that tuxes were hardly necessary in such company, as he’d have felt equally at ease wearing his PJs.

But this comfort and camaraderie does not signal lethargy. Loans have moved with the times and the market has become a broader church working with other products like bonds, Schuldscheine and private placements. It is also moving into new, important markets such as Africa.

Over the last five years, bankers have had to deal with slow-growing economies and working through what must at times have seemed like unmanageable amounts of bank capital and liquidity regulation. But we’re coming to the end of that regulatory flood with a much stronger and sounder banking system.

Loans should be a prime beneficiary of this more robust environment. Let’s hope there is even more for us all to sing and wave our napkins about when we meet in February 2016.

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