Large Irish firms tap international lenders for €7.6bn of loans last year
Published 16/02/2012 | 05:00
LARGE Irish companies were able to tap international lenders for €7.6bn of loans last year, according to research prepared for the Irish Independent.
Lending into the Irish companies was up 10pc compared to the previous year, and export-oriented firms took the lion's share of funds.
The research provides details of "syndicated loans", debt facilities provided by groups or syndicates of Wall Street and European banks to Irish firms.
Unlike internationally traded 'bonds' the loan market is private and financial details are more difficult to source.
The latest data reveal significant borrowings by long-established Irish plcs like Kerry and CRH, semi-states and an emerging breed of agri-foods names.
The research by Thomson Reuters LPC shows that Wall Street Bank JP Morgan was the most active, thanks to its role financing €2.3bn of loans for IFSC-headquartered insurer XL.
While small and medium-sized companies in the domestic market struggled to raise credit, XL borrowed a hefty €2.3bn in the international money markets from a bank group including Citibank, JP Morgan and RBS.
XL is little known in this country but has become a major player in the global insurance and 're-insurance' space.
Banks that arrange syndicated loans book big fees for putting the deals together, on top of the interest charged to borrowers.
The research shows RBS, which includes Ulster Bank, was active in the highest number of syndicated loans in 2011, at 11, compared to AIB's nine and Bank of Ireland's role in five loans. Those figures do not include SME lending or bilateral loans made to companies by individual banks.
A surprise name among the top 10 borrowers is Monaghan Middlebrook Mushrooms.
It tapped lenders for €76m in term financing in 2011, understood to be linked to its acquisition of Dutch rival Walkro from Bencis Capital Partners.
Indeed, four of the biggest loans of 2011 and 2012 so far were to the food sector, according to the research, pointing to the growing confidence of international markets in the food sector, and agri-businesses' appetite to expand.
But while big firms were able to tap the markets last year the latest figures show that lending is running at less than half the level of 2007 and 2006.