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Finance

M&A activity has Southeast Asia lending record amounts

SINGAPORE -- The volume of syndicated loans in Southeast Asia was at its largest ever in 2014 with Singapore leading the pack, according to a report by a financial research firm Dealogic. As merger-and-acquisition activity rises in Southeast Asia, more companies are using syndicated loans for funding.

     Loans hit a record high of $119.5 billion in the region, up from $86.6 billion the previous year. The number of syndicated loan deals totaled 247, compared to 294 in 2013. Singapore is the largest generator of syndicated loans in the region. The city-state's volume expanded 71% to $60.5 billion in 2014, recording the largest year-on-year increase in Southeast Asia. Indonesia and Malaysia followed, with $21.4 billion and $18.3 billion of syndicated loans in 2014, respectively.

     Foreign players as well as Singaporean and Malaysian banks contributed to the increase in syndicated loan activities in 2014. Standard Chartered Bank held the largest market share of 6.2% in Southeast Asia as the mandated lead arranger, followed by Sumitomo Mitsui Financial Group and Singapore's Oversea-Chinese Banking Corp., with shares of 5.9% and 5.8% respectively.

     The largest loan in the region in 2014 was a $5.7 billion facility completed by Malaysia's offshore platform builder SapuraKencana Petroleum

     Increased M&A activity likely drove up the volume of syndicated loans in the region. According to a report by research firm Mergermarket Group, the Asia-Pacific region saw 3,143 mergers and acquisitions worth $533 billion between January and November 2014, both figures exceeding those of the entire year of 2013. The report points out that the region's oil and gas sector is set to see a surge of interest from financial investors due to the increased energy needs in Southeast Asia. 

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