The syndicated loan market for top US investment-grade companies is still based on a relationship lending model, but lenders expect return on capital to take precedence next year as banks continue to implement regulatory and capital changes, according to Thomson Reuters LPC's quarterly lending survey. Syndicated loans have traditionally been loss-leading products that allow banks to net other more lucrative ancillary business, such as bond or equity mandates, but the increasing cost of capital is leading lenders to scrutinise overall returns from clients more closely. Return on capital is becoming a key consideration. Some 53% of lenders said that it would be their top priority next year, compared with 42% today. Only 19% said that return on capital was their priority last year, according to the survey.
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