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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: ColtonGang who wrote (19449)	3/14/2001 1:39:25 PM
From: zbyslaw owczarczyk	Read Replies (2) \| Respond to of 24042

from J.P. Morgan Chase & Co.: Syndicated loan market in better shape than some think NEW YORK, March 14 (Reuters) - Wall Street concerns about bad loans at U.S. banks will not hurt the massive syndicated loan market, which is in better shape than many realize, a J.P. Morgan Chase & Co. Inc. (NYSE:JPM - news) executive said on Wednesday. The volume of new syndicated loan issuance has slowed and worries about loan quality loom, but the market also has matured and changed over the last 18 to 24 months, Donald McCree, co-head of the North American credit markets group at J.P. Morgan Chase, told an analysts meeting in New York. J.P. Morgan Chase is one of the largest players in this market, which deals in loans worth $20 million or more that are shared among three or more banks. ``Volume is down but the mix of transactions is much more interesting to us ...,'' McCree told the Bank & Financial Analysts Association meeting. ``The demise of the loan market is way overstated.'' The market is more rational than it was before, and also broader due to increased participation by institutional investors, not just U.S. and foreign banks, McCree said. The hurdle is that syndicated loan volume has dropped partly because of a decline in cash financing business for mergers and acquisitions, McCree said. ``The problem is that in July 2000, there was $150 billion in cash financing going to the M&A market,'' he said. ``Today that volume is down to $50 billion.'' Pricing also has risen in the syndicated loan market and is expected to go higher for the foreseeable future, he added. ``Pricing is going up and has gone up in virtually every segment of the market,'' McCree said. ``We think pricing will continue to trend upwards ...'' Meanwhile, prevalent concerns about bad loans should not hurt the syndicated loan market over the medium to long-term, he said. U.S. banks have had to put aside increasing amounts of money to protect against possible borrower defaults as the once-robust economy slows and corporate profits dwindle. ``You need to be careful to draw a distinction between an equity correction and volatility in the bond market, and a credit crunch,'' McCree said. ``Are charge-offs creeping up? Yes. Is it a problem for the banks? For some, yes, possibly. Is it a problem for the market? Absolutely not.'' McCree addressed analysts on a day when U.S. bank and broker stocks took a beating because of worries about wide-scale weakness at Japanese banks and the potentially sluggish outlook for the U.S. economy. J.P. Morgan Chase's shares fell $4 a share, or more than 8 percent, to $43.40 on Wednesday on the New York Stock Exchange, Citigroup Inc. (NYSE:C - news) fell $3.59, or about 7 percent, to $44.80 and Bank of America Corp. (NYSE:BAC - news) shed about 6 percent, or $3.11 a share, to $51.14. The benchmark Dow Jones Industrial Average, which includes Citigroup and J.P. Morgan Chase among its components, tumbled 3.65 percent, or 375 points, to 9915. The syndicated loan market has changed with the influx of institutional investors, who have provided an added supply of money and contributed to a busy secondary market for syndicated loans, McCree said. ``The liquidity pool, despite what you read, has really broadened and deepened over the last several years,'' he said.