For the ninth consecutive year, Chase tops the syndicated lending league tables by a considerable margin. Peter Gleysteen, global head of syndicated financing at Chase attributes this to “embodied experience, knowledge and judgement of our professional team.” Heads of personnel at competing banks should be somewhat rattled by his follow-up that “the few great people in the business who are not in this team – my mission is to make them part of it.”
Over the last 12 months, Chase has been lead manager for over 600 deals. Globally this gives the bank a market share of 34%, and in US market Chase enjoys a share of around 50%.
League table standards differ in the various markets. US tables give full credit for the total size of a deal to lead arrangers, whereas the standard European model proportionately allocates credit to any bank with the arranger title – and there can be many arrangers on a deal by the time it is fully underwritten. Even the latter breakdown still leaves Chase comfortably ahead of the pack.
The continuing advantage that such a lead gives is, says Gleysteen, extremely significant in that having greater knowledge as to the state of play with various deals allows for a better sense of ever-changing bank liquidity levels: “We’re talking about a market very sensitive to supply and demand, and sometimes a very new supply of issues eats up available cash. If we’re causing it, we can see what’s happening. Thus we can use a lot of precision in pricing and execution and also in terms of expectations vis a vis market conditions.”
Demonstrating however that no matter how scientific one may be, a dynamic market may undercut an initially well-priced deal, Chase introduced market flex and more recently, in late 1999, “reverse flex”, by which borrowers can benefit from improved terms if demand for assets is strong. The latter was first used in Georgia Gulf and Aurora Foods and is becoming an industry norm in loan documentation. “What’s surprising,” says Gleysteen “is that people are surprised about that. After all, that’s how the securities market operates, and it’s a great thing that we’re seeing an accelerated convergence between the loan and bond markets. This makes for a more efficient, more predictable and reliably accessible market both for issuers and for investors.”
Increased simplicity of syndicated loan transactions has been achieved by Chase’s use of the internet, distributing more than 350 deals in the last year to the tune of $500 billion. In similar vein, Chase has pioneered video lender meetings enabling prospective investors to view management presentations from remote locations. That these destinations should include Europe, the US, Australia, Japan and Latin America is a reminder of Chase’s thoroughly global sway.
