China’s M&A loans slump for second year due to US trade war tensions
- Event-driven loans made by Chinese firms in foreign currencies are down 41 per cent this year to US$18.2 billion from US$30.7 billion in 2016
- Overseas volumes have slumped amid tighter Chinese government scrutiny and a crackdown on capital outflows
Chinese acquisition-related loans look set to end 2018 lower for the second year running with prospects of a turnaround looking dim as a trade war with the United States crimps appetite for overseas deals.
Event-driven loans made by Chinese firms in foreign currencies are down 41 per cent this year to US$18.2 billion from US$30.7 billion in 2016, according to Bloomberg-compiled data. Those deals include acquisition financing, leveraged and management buyout facilities and secondary buyout loans.
Overseas volumes have slumped amid tighter Chinese government scrutiny and a crackdown on capital outflows.
As the US trade war with China persists and deal makers meet resistance from foreign regulators, the environment will continue to be challenging, according to Standard Chartered Plc.
“Chinese buyers are now more likely to sit on the sidelines, awaiting a clearer picture on regulation and trade tensions,” said Lyndon Hsu, global head of leveraged and structured solutions at Standard Chartered in Singapore.