Bloomberg reported on June 10, 2012 that the scandal surrounding the London interbank offered rate is threatening to undermine confidence in syndicated loans and hasten companies’ flight to bonds.

Bloomberg said the rate-rigging scandal is spreading uncertainty about whether the benchmarks reflect lenders’ true cost of funding.

Data compiled by Bloomberg show that non-financial companies in the U.S. borrowed $483 billion through syndicated loans and credit lines this year, a 13% drop from the same period of 2011, while in Europe volumes fell 25% to $322 billion.

Bloomberg noted, according to Fitch Ratings report, that loans were overtaken by bonds for the first time in Europe this year. Bond issues made up 52% of the $575 billion of new corporate funding in the first half, compared with 29% for the whole of 2011.

To read the full Bloomberg article, click here.