(Photo: Allison Bell/TA)

(Bloomberg) — Investment-grade syndicated lending in the United States dropped 20% from the same period last year, marking the slowest half-year since 2013, according to data compiled by Bloomberg.

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

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

Refinancing volume was down 20% this first-half from a year ago, but still accounts for almost 80% of total lending.

There isn’t enough incentive to refinance or raise working capital or new money, according to Robert Danziger, Deutsche Bank AG’s head of investment-grade loans.

“Pricing and fees have stabilized, so companies may not get any further pricing reduction, and risk losing lenders in the original banking group,” he said.

Meanwhile, bankers are attributing the decline in M&A to uncertainty in repatriation of funds, tax policies and interest deductions as U.S. undergoes it’s first year under a new administration.

“Despite the backdrop of very strong and supportive debt markets, the uncertainty around tax reform and the regulatory environment has contributed to the slowdown in debt financed M&A,” said Tom Cassin, co-head of investment-grade finance at JPMorgan Chase & Co.

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