AFP Loan Market Data Provides Corporate Loan Benchmarks
Arranging a corporate credit facility is never a simple task. Companies seek favorable pricing, maximum credit, and limited financial covenants that might restrict corporate activities or decisions. Lenders, on the other hand, benefit from wider spreads, smaller exposure to each credit, and restrictive covenants that protect their interests. Most CFOs and treasurers are painfully aware that banks also use credit facility negotiation to ask for, or in many cases demand, a greater share of their commercial and investment banking fees.
“With over $2 trillion in corporate loans maturing before the end of 2012, corporate finance executives will be competing for access to a limited pool of available credit,” said Jim Kaitz, AFP President and CEO. “To get the credit they deserve at terms that are competitive for their organizations, CFOs and treasurers need to understand the pricing and terms on similar deals that are currently being executed.”
While most experienced finance executives have learned to play the negotiation game, many are finding that they must play with a new set of rules. They must renegotiate a mountain of corporate credit just as the world is emerging from the greatest banking crisis that any of us has ever experienced. In the upcoming cycle, negotiations will be further complicated by uncertain economic conditions and banks’ understandable protection of their balance sheets.
The AFP Loan Market Data, which is provided by Thomson Reuters LPC and featured in their weekly Gold Sheets publication and LoanConnector online service, provides benchmark pricing for recent investment grade and non-investment grade borrowers. Information available to AFP members includes average loan pricing, tenor, and size for a range of credit ratings, as well as information on the variation in pricing. Through Thomson Reuters LPC, corporate finance executives can subscribe to access more detailed information on the underlying deals that make up the benchmark pricing, as well as extensive analysis of the corporate loan markets.
“Promoting transparency in the syndicated loan market is vitally important to Thomson Reuters LPC. We are thrilled to be working with the AFP to bring timely and valuable loan information directly to the corporate treasurers and finance professionals that need it,” said Mike Lavin, Global Head of Thomson Reuters LPC.