The coronavirus crisis dragged down Asia-Pacific, ex-Japan, syndicated- and club-loan volumes in 1Q20 to their lowest levels since 3Q16, led by sharp declines from Singapore and China and in M&A-related transactions, according to figures released by Debtwire.
Volumes fell 28.8% year-on-year (YoY) to US$60.02 billion in 1Q20 from US$84.27 billion in the same period a year ago, while deal flow declined 22.5% to 155 deals, from 200 deals in 1Q19.
March’s volumes took the biggest hit, falling 51.8% to US$20 billion across 51 deals, from US$41.52 billion across 103 deals in the same month in 2019. By comparison, January and February experienced a more modest YoY decline of 5.6% and 7.7%, respectively.
With travel restrictions and social-distancing rules in various countries limiting deal-making activity, several borrowers opted for the club route. Club loans accounted for 46.9% of the total 1Q20 volumes, compared with 32% in 1Q19.
Lenders in Asia have turned highly selective in underwriting syndicated loans as they struggle to assess the impact of the coronavirus outbreak and low oil prices on borrowers.
HSBC took the top spot in the Asia-Pacific, ex-Japan, bookrunner league table in 1Q20, capturing a 6.7% market share with US$2.27 billion from 19 deals, followed by CMB Wing Lung Bank (6.6%, US$2.2 billion, seven deals), and Bank of China (6.5%, US$2.19 billion, 13 deals).
For Asia, ex-Japan and Australasia, CMB Wing Lung Bank topped the bookrunner league table, taking an 8.6% market share with US$2.2 billion from seven deals, followed by Bank of China (8.1%, US$ 2.08 billion, 12 deals), and Standard Chartered Bank (7%, US$1.78 billion, 13 deals).
For the Asia-Pacific region, ex-Japan, Allens took the top spot in the borrowers’ counsel league table in 1Q20, capturing a 13.2% market share with US$2.24 billion from five deals, followed by Herbert Smith Freehills (11.4%, US$1.94 billion, four deals), and White & Case (8.7%, US$1.47 billion, five deals).
For lead banks’ legal counsel, White & Case topped the Asia-Pacific, ex-Japan, league tables, accounting for 9.9% of market share by value (US$3.76 billion, 11 deals), followed by Baker McKenzie (9.7%, US$3.68 billion, nine deals), and Linklaters (8.8%, US$3.36 billion, three deals).