Banks are making the shift from ‘post-crisis’ lending, entering into longer periods of loan commitments. Overall, investment-grade loans to U.S. companies have more than doubled year-over-year, to $209 billion. A year ago, a company rated triple-B-minus, the bottom of the investment-grade spectrum, would have paid three percentage points over the three-month London interbank offered rate, what banks charge one another. That rate has fallen to between 1.5 and 1.75 percentage points over Libor.
Stats you may find interesting (according to data provider, Dealogic):
– U.S. strategic Mergers and Acquisitions (M&A) activity so far this year, excluding private-equity firms, is up 39% over the same period in 2010, at $373.7 billion.
– Since the start of the year, banks have lent $66.6 billion in five-year U.S. corporate investment-grade loans, some of the longest available, almost 25 times the amount this time last year.
(Source: Bank Lending Goes Long on High Quality.Wall Street Journal. May 17, 2011. Kate Burne)