Romanian syndicated loan market to grow fuelling new business opportunities
Bucharest, 07 December 2017: Local bankers, borrowers and lawyers were brought together at the first seminar on syndicated lending organized by law firm Zamfirescu Racoți & Partners recently, together with the Loan Market Association (LMA), the authoritative voice of the syndicated loan market in Europe, the Middle East and Africa (EMEA). The event offered unprecedented opportunity for key market players to interact with high-level speakers and discuss the developments of the local syndicated loan market.
”Syndicated loans have been facing pressures from multiple directions in recent years – political turmoil, economic volatility and the financial crisis, but the overall local market is on the rise and has plenty of room to grow due to planned investments in energy and infrastructure. Banks and institutional investors alike are redefining the market with creative financing solutions and business model revisions, pushing the industry on the road of gradual change. In this context, it was timely to discuss the challenges and market outlook and so we approached the LMA to help bring together key players of the primary and secondary syndicated loan markets in EMEA”, said Elena Iacob, partner of ZRP and co-coordinator of the Banking & Finance department.
”We always welcome the opportunity to visit new countries where LMA membership is expanding. We were delighted to support Zamfirescu Racoți & Partners in hosting this event in Bucharest, our first in Romania. We were very pleased with the attendance at the event and the quality of engagement with participants. The event provided an ideal forum to discuss both the local and wider European loan market and to highlight the important role the LMA plays in representing the loan product,” commented Nicholas Voisey, Managing Director at the LMA.
The main conclusions from the discussions were:
- There is liquidity in the market, and the loan product, despite all the ups and downs the economy has experienced in recent years, remains a viable financing tool;
- A borrower friendly environment will continue, given ample domestic liquidity and increasing diversification in financing sources, such as bonds, IPOs, and IFIs equity investments;
- Romanian market size expected to easily cover the majority of local financings in the short term, while larger deals may raise interest from international banks;
- Brexit will bring challenges but there are provisions addressing the issue of change of lenders.
- First key rate hike expected in the second Quarter of 2018. Liquidity surplus – room for tightening by narrowing stranding facilities corridor expected in 4 Quarter of 2017, ahead of a key rate hike in 2 Quarter of 2018;
- The role of the facility or security agent as a single point of contact between the finance parties (lenders, arrangers, issuing banks, other creditors) and obligors (borrower, parent) strengthens and is becoming more complex;
- Improvements in the legislation are a must for a more flexible structuring of secured finance-banking transactions.
Zamfirescu Racoți & Partners
Zamfirescu Racoţi & Partners (ZRP) is a leading Romanian law firm, offering legal assistance services both in business law and litigation & arbitration areas.
ZRP has a team of 53 attorneys at law, out of which eight are partners, Călin-Andrei Zamfirescu, Ioana Racoţi and Stan Tîrnoveanu – founding partners, Cosmin Vasile (managing partner), Anca Danilescu (senior partner), Elena Iacob, Alina Tugearu and Antoniu Obancia (partners) and one partner of counsel – Valerian Cioclei.
The Loan Market Association
The Loan Market Association (LMA) has as its key objective improving liquidity, efficiency and transparency in the primary and secondary syndicated loan markets in Europe, the Middle East and Africa (EMEA). By establishing sound, widely accepted market practice, the LMA seeks to promote the syndicated loan as one of the key debt products available to borrowers across the region.
As the authoritative voice of the syndicated loan market in EMEA, the LMA works with lenders, law firms, borrowers and regulators to educate the market about the benefits of the syndicated loan product, and to remove barriers to entry for new participants.
Since the establishment of the LMA in 1996, our membership has grown steadily and now stands at over 670 organisations covering 61 countries, comprising commercial and investment banks, institutional investors, law firms, service providers and rating agencies.