The European Commission has recently issued a call for tenders (available here) which provides further details on its proposals for a study in relation to syndicated lending and its impact on competition. The Commission indicated its intention to study the sector in February in its Management Plan 2017, commenting that the sector “exhibits close cooperation between market participants in opaque or in-transparent settings, such as over-thecounter (OTC) activities, which are particularly vulnerable to anticompetitive conduct”, and that its initial work in 2017 would focus on “obtaining relevant information on market structure, dynamics between market participants and potential competition issues”. The work requested by the tender represents the initial information gathering referred to in the Commission’s Plan and provides an insight into the Commission’s areas of interest in the loan syndication market.

The work being commissioned by this tender includes a review of the impact of loan syndication on competition in EU credit markets and will extend to markets in Germany, Poland, Spain, France, the Netherlands and the United Kingdom. The Commission is seeking an overview of the syndication process with regards to loans offered for project finance, leveraged buy-outs and infrastructure finance in particular. This will involve an examination of how syndicates are formed and the way in which lenders co-operate to offer loans, including contractual terms, ancillary services and market transparency. The Commission also wants to understand the economic benefits and drawbacks of syndication for lenders and borrowers and the shifts in bargaining power between them, as well as the relevant regulatory and enforcement framework.

The Commission has prescribed that the review shall provide a “systematic analysis” of the loan syndication market and “detailed factual information…based on direct information from market participants through stakeholder interviews based on agreed questionnaires”. The Commission anticipates that the project will take nine months.