syndicated loans

Big numbers probably have little effect on you, post crisis. Once a number is beyond a multiple of one’s own salary or house value, it is beyond comprehension. But $3,335bn? That is how much the US will need to refinance in the next six years from syndicated loans.

Regular blog readers will recall that Spain is facing $200bn maturing syndicated loans in the coming six years, dwarfing what is owed by Greece. That is about a fifth of the country’s annual income. But what is owed by the US is approaching a quarter

A troubling chart from Thomson Reuters this morning, showing Spain facing $203.7bn maturing syndicated debt in the coming six years. That is roughly a fifth of the country’s annual gross domestic product (which was $261.5m for Q4 last year). Italy is second with $95.9bn over the same period. Greece – orange on the chart – is almost insignificant in context.

Chart courtesy of Thomson Reuters; source Thomson Reuters LPC/DealScan
Maturing loans are significant as new debt will be needed to plug the gap. Countries perceived as risky will pay a higher ‘new issue premium’, as a mooted deal in Greece is currently showing. Two questions: who will be these countries’ creditor (China?)? And what are the figures for the UK & US (I’m working on this one)?

Some consensus among the American media that extending the US housing tax credit is a bad idea. And a conflict between those who think banks should be made smaller, and legislators, who are currently pursuing a strategy of better monitoring and increased powers over big banks