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Revival in M&A loans buffers overall slowdown in lending in 1Q19

APAC Chart of the Week: 4 April 2019

Loans backing M&A deals made a comeback in 1Q19 in APAC (ex-Japan) after a lacklustre 2018, despite a 21.6% YoY decline in overall loan volumes in the region for the quarter.

M&A financing surged to USD 17.94bn across 24 deals in 1Q19, far exceeding the USD 6.82bn from 11 deals in the same period last year and surpassing volumes in each 2018 quarter. Around 31.6% of the M&A loans by value in 1Q19 was linked to the real-estate sector, 22.6% to basic materials and 18.3% in consumer goods and services.

The real-estate deals include Henglilong Investments’ and Gaw Capital’s HKD 8.33bn (USD 1.06bn) loan backing the purchase of Cityplaza Three and Four from Swire, as well as Oxford Properties’ AUD 2.21bn (USD 1.59bn) take-private of Investa Office Fund, a portfolio of 19 prime office buildings in Australia.

As for 2Q19, at least 10 deals with a combined loan value of USD 5.77bn are already in the pipeline, mainly for leveraged buyouts in Australia, Hong Kong and Singapore.

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Jason Huang-Jones APAC Data Manager Debtwire
Jason Huang-Jones APAC Data Manager Debtwire

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