Banks put the brakes on “jumbo” loans to businesses

Posted Apr 3, 2022, 11:39 AMUpdated on Apr 3, 2022 at 11:43 am

European banks lower the curtain. As a result of the war in Ukraine, syndicated loans – these “jumbo” loans granted to companies and which banks share with several – collapsed by 52% in the first quarter in Europe, to 115 billion dollars, a lowest since 20 years in a first quarter, according to figures published Friday by Refinitiv.

“The war in Ukraine has created volatility in the markets and banks are more wait-and-see,” said Paul Gibbs, co-head of financing operations in Europe, Middle East and Africa (EMEA) at Citi. Riskier debt issues (high yield) are difficult; issuers prefer to postpone their operation when they can; the boards of directors are cautious about M&A operations. But refinancing on the more secure segment (“investment grade”) can still continue”.

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