Investment grade syndicated lending in the U.S. dropped 20% fromthe same period last year, marking the slowest half-year since2013, according to data compiled by Bloomberg.

The number of deals fell 18% to a seven-year low.

Refinancings helped sustain market activity even as volumeslowed, while acquisition-related deals suffered.

Refinancing volume was down 20% during the first half from thesame period a year ago, but still accounts for almost 80% of totallending.

There isn't enough incentive to refinance or raise workingcapital or new money, according to Robert Danziger, Deutsche Bank'shead of investment-grade loans.

“Pricing and fees have stabilized so companies may not get anyfurther pricing reduction, and risk losing lenders in originalbanking group,” he said.

Meanwhile, bankers are attributing the decline in M&A touncertainty in repatriation of funds, tax policies and interestdeductions as U.S. undergoes its first year under a newadministration.

“Despite the backdrop of very strong and supportive debtmarkets, the uncertainty around tax reform and the regulatoryenvironment has contributed to the slowdown in debt-financedM&A,” said Tom Cassin, co-head of investment-grade finance atJPMorgan Chase & Co.

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