Goldman Sachs Focuses on Grabbing Share in U.S. Leveraged Loans

  • Bank leaps to top of league table for institutional loans
  • Mezzanine fund seen as a boost to Goldman’s lending business

Goldman Sachs Group Inc. is focused on beating the competition in the fierce race to underwrite risky U.S. corporate loans. A recent decision to grab more share paid off -- the bank topped the league table for U.S. institutional term loans, where issuance more than doubled in the first half.

  • Goldman ranks No. 1 in the U.S. institutional loan league table for bookrunner this year, according to data collected by Bloomberg as of July 6
  • "A couple of years ago we decided to focus on our market share in leveraged loans and specifically in institutional term loans," said Christina Minnis, who co-heads Americas credit finance group and was recently named global head of acquisition finance
  • Goldman has a mezzanine fund that invests in companies for which the bank underwrites leveraged loans. The mezzanine credit fund is seen as a competitive advantage for Goldman in its loan underwriting effort
    • GS Mezzanine Partners is "the largest mezzanine fund family in the world, with more than $30b of leveraged capital invested since 1996," according to Goldman
  • GS Mezzanine Partners seeks to provide private high yield capital for mid- to large-sized leveraged and management buyout transactions, recapitalizations, financings, refinancings, acquisitions and restructurings for clients such as private equity firms, private family companies and corporate issuers
  • Goldman’s move up shoves aside traditional commercial bank league table leaders
    • "Loans historically were dominated by the traditional commercial banks": Minnis
  • Goldman increased U.S. institutional loan market share by 2.2 percentage points, the largest gainer this year, to command 8.53% of about $590b in total volume
  • This is the first time Goldman has ranked higher than No. 3 in U.S. institutional loan league table
    • Goldman moved up five spots, beating 2016 leaders Credit Suisse and BofA Merrill Lynch
    • BofAML and JPM were #1 and #2 in 2015; BofAML and CS in 2014; JPM and BofAML in 2013; JPM and BofAML in 2012
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