BANK CONSOLIDATION

Bank consolidation is creating a growing need for BDCs:


  • There are approximately 4,700 fewer domestic banks today than there were 20 years ago.1

  • The participation rate of the remaining banks has been reduced from approximately 70% to approximately 10%.2

  • The cost of debt capital in the middle market is generally higher than in the large market, which typically results in more attractive yields to middle market lenders.

 





 

 

 


1) Data as of: 12/31/94 - 9/30/16. Source: Federal Deposit Insurance Corporation, represents number of commercial banking institutions insured by the FDIC as of 9/30/2016.
2) Data as of: 12/31/94 - 9/30/16. Source: 2016 Q3 LCD Quarterly, Primary Market for Highly Levered Loans Banks vs Non-Banks.
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