2a) How has the dollar volume of the secondary loan market changed between 2008 and 2014? The volume of new loan issuances dropped sharply in the secondary loan market from first quarter of 2008 at $160billion to fourth quarter of 2008 at $101billion. The lowest volume of $80.6 billion was registered in the fourth quarter of 2011. Steady increase in volume began in third quarter of 2013. As of 2014, the volume of new loan issuances is $140 billion which is still $20 billion less then at the beginning of this period.
2b) What is a distress loan? A loan that is not expected to be paid at the face value and/or is trading at or near a rate that is less than or equal to 90 percent of face value are indicators that a loan may be a distressed loan. The term can be loosely defined as the debt of companies that have filed for bankruptcy or have a significant chance of filing for bankruptcy in the near future.
2c) How has the portion of loans classified as distressed changed during this period? …show more content…
Bookrunner? The Bookrunner is one or a small group of commercial or investment banks which takes overall control of structuring, pricing and inviting other lenders into a loan syndication. Typically, in a syndicated loan facility, the initial lenders of the loan also having the title of Lead Arranger. In most transactions, the Lead Arranger drives the deal; sets the terms; interfaces with the client and investors; prepares, negotiates, and closes documents; and manages the syndication process. Consequently, the Lead Arranger generally receives premium compensation, which increases with the complexity or difficulty of the financing.
3b) Who is the lead arranger of secondary loan market trading? According to league tables compiled by Thomson Reuters, Bank of America Merrill Lynch is the top U.S. Lead Arranger in first quarter of 2015.
3c) Briefly describe this primary arranger and identify a significant event that occurred to this entity during the financial
2b) What is a distress loan? A loan that is not expected to be paid at the face value and/or is trading at or near a rate that is less than or equal to 90 percent of face value are indicators that a loan may be a distressed loan. The term can be loosely defined as the debt of companies that have filed for bankruptcy or have a significant chance of filing for bankruptcy in the near future.
2c) How has the portion of loans classified as distressed changed during this period? …show more content…
Bookrunner? The Bookrunner is one or a small group of commercial or investment banks which takes overall control of structuring, pricing and inviting other lenders into a loan syndication. Typically, in a syndicated loan facility, the initial lenders of the loan also having the title of Lead Arranger. In most transactions, the Lead Arranger drives the deal; sets the terms; interfaces with the client and investors; prepares, negotiates, and closes documents; and manages the syndication process. Consequently, the Lead Arranger generally receives premium compensation, which increases with the complexity or difficulty of the financing.
3b) Who is the lead arranger of secondary loan market trading? According to league tables compiled by Thomson Reuters, Bank of America Merrill Lynch is the top U.S. Lead Arranger in first quarter of 2015.
3c) Briefly describe this primary arranger and identify a significant event that occurred to this entity during the financial