Vigorous lending driven by the desire for yield have created a banner year for loan markets in 2021. Per S&P Global Leveraged Commentary and Data (LCD), the “U.S. leveraged loan market is on a record pace for issuance in 2021,” with total institutional loan volume at $487 billion as of the end of Q3 2021.1 As a result, the U.S. loan markets have drawn in $25.9 billion in investor inflows, while the volume of primary Collateralized Loan Obligation (CLO) issuance reached $46.
Scale is a perennial consideration in the context of loan agency services. Depending on the nature of a particular deal, factors such as the number of lenders, the size and structure of the facility, and the needs of the borrowers can all influence the choice of an agent. These are some of the elements that help determine whether a large-scale, off-the-rack approach or a more tailored and collaborative approach will better address unique stakeholder needs.
New transaction structures and increasing complexity have continued to proliferate in the loan markets for some time. As a result, data and reporting needs have also become more involved, especially over the past three years. Increased investor demand for data and reports, as well as higher scrutiny from regulators are also playing a part in changing the needs of loan market participants.