LONDON, March 31 (Reuters) - Syndicated lending in Europe, the Middle East and Africa (EMEA) fell to $140.2 billion in the first quarter, the lowest first quarter volume since $128.7 billion in 2004, and 41 percent down on first quarter 2013, Thomson Reuters LPC data shows.
Low deal flow has seen terms and conditions for borrowers continue to improve as banks bid aggressively to win rare mandates but with bond markets and equity markets open for business, borrowers have an increased range of funding alternatives to choose from.
"It's strange that volumes aren't reflecting the wider level of activity, the amount of good client engagement and the amount of pitching that is going on. The market feels pretty positive, it's just that there has been limited follow through to actual deal flow," a senior banker said.
The continued absence of large-scale M&A financing also hit volumes. Loans backing acquisitions were 61 percent down year-on-year at $15.2 billion as borrowers postponed purchases, turned to other markets for funding or used cash of balance sheet.
Despite competitive market conditions that have led to a further squeeze on pricing, refinancing was down 31 percent down year on year, as most refinancing has already been completed with only a few big names remaining to tap the market. (Editing by Christopher Mangham)