Lending in the third quarter totalled $212bn, with 21 per cent taken by BHP’s $45bn loan to back its bid for Potash Corp, the biggest loan since brewer ABInBev’s $45bn acquisition loan in 2008.
Banks are more willing to lend for big takeovers and with borrowing cheap would-be buyers are seizing the chance, meaning that sensible deals that were ruled out because financing was too scarce or costly may now return to the agenda, even if they run into the tens of billions of dollars.
BHP’s loan signalled the return of big-ticket M&A for the first time since 2008. The deal pushed the third-quarter acquisition loan volume to $57bn, the highest quarterly total for M&A since the fourth quarter of 2008.
With $60bn of loans in the pipeline – deals in syndication but not yet signed – the market is on track to beat last year’s $650bn annual total, the lowest since 2003.
The third quarter is traditionally the quietest three months of the year, since it includes the summer holidays, but it still managed to record the second highest quarterly total since the second quarter of 2008.