Loan Syndication and Competition Law in the EU and UK

EU syndicated loans are likely to continue to play a significant role to try to solve the liquidity crisis emerging from the 2020 global pandemic. As economic activity slowed and uncertainty rocketed during the COVID-19 outbreak, non-financial firms dashed to debt markets – namely, bond and syndicated loan markets – to secure funds for covering operational expenses, and possibly buttress their cash buffers. However, banks should be aware of the potential competition law risks inherent to syndicated loans and know how to mitigate them. This client alert provides a reminder on the findings of the most recent European Commission’s report on the EU syndicated lending sector, “EU loan syndication and its impact on competition in credit markets” (“the EC Report”). The Report responds to increasing antitrust scrutiny of the syndicated lending sector by assessing whether there are potential competition concerns with regard to syndicated loans in leveraged buyouts (LBOs), project finance (PF) and infrastructure projects (INFRA). Geographically, the Report focuses on France, Germany, the Netherlands, Poland, Spain and the UK.