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Analysts Expect Rebound in IPO-Related Revolving Loans

April 15, 2019, 09:10 AM
Filed Under: Industry News
Related: IPO

With public offerings from large companies like Uber and Pinterest on the horizon, banks can expect to witness a spike in loan volume to support the IPO process, Reuters reports.

According to data from Thomson Reuters LPC, the rebound comes following a year that saw an absence of IPO-related syndicated bank lending; and IPO-related U.S. bank syndicated loan financing ranged from just $50 million and $1.85 billion over the three years prior. 

That's compared to $9.7 billon issued in 2014.

Analysts say momentum is ramping up for 2019 to be a strong year for public offerings, and expect that to lead to a rise in revolving loan volume from large bank syndicates.

“You could argue that with the increase in IPOs companies will have an increased need for these types of loans, but some companies have cash on hand or other types of financing in place, so it really depends on the company,” a senior banker told Reuters.

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