Insights

The past year and a half has not been kind to investment banks’ syndicated loan departments. Their job is to originate loans, often for leveraged buyouts, to creditworthy-ish companies and sell them on to investors, in exchange for a fee. It was lucrative business, until rates started rising. Suddenly, banks were nursing losses from “hung loans”, stillborn debt stuck on the banks’ balance sheets. As uncertainty about rates and recession stalked the banks, their loan syndication departments pulled back.