September 23, 2020 - The LSTA and its members have long recognized the essential role the syndicated loan market plays in the U.S. economy – and the importance of providing financing to companies across sectors and geographies. While there has been much anecdotal evidence to support this, we now have hard data that makes those views conclusive.
The LSTA commissioned a study conducted by the economic research firm John Dunham & Associates (“JDA”) that examined the various participants in the syndicated loan industry, from the large international, national, and regional banks, mutual fund companies, pension funds, and other institutional lenders to the array of borrowers, including U.S. domestic companies with a rating below Baa3 or BBB. There are 326 lending firms and 1,140 borrowers represented in the research.
Based on data provided by Infogroup, the LSTA, S&P, the FDIC, and various state and federal governments, the syndicated loan industry contributes over $2.7 trillion in economic output and employs over 10 million Americans.
Another of the powerful findings of the study is that the syndicated loan business generates economic activity in every congressional district across the U.S. and results in over $288 billion in federal and state tax revenue.
This research demonstrates that a fair and efficient corporate loan market can propel American businesses forward and assist in facilitating growth and progress across the nation and in practically every industry. Even with an ongoing pandemic and its subsequent economic uncertainty, the research demonstrates that syndicated loans are an essential part of our capital markets and will continue to play an integral role in supporting the economy.
Findings also show that the top five borrowing industries include business and personal services, retail, travel and entertainment, manufacturing, and transportation and communications. As we know, continuing to support businesses across all of these sectors will be essential to reviving the American economy as we navigate the ongoing effects of COVID-19. Read the study below and please feel free to share it with any other interested parties. Recently the LSTA Loan Market Economic Impact Study was picked up by Politico in its daily Morning Money newsletter on September 25th.
ICYMI: FOOTPRINT OF THE SYNDICATED LOAN MARKET— Also via Victoria: Per a new study commissioned by the Loan Syndications & Trading Association: “The syndicated loan industry contributes over $2.7 trillion in economic output and employs over 10 million Americans. … The syndicated loan business generates economic activity in every congressional district across the U.S. and results in over $288 billion in federal and state tax revenue.”
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