The supply demand imbalance persists in a still lackluster M&A market, which has lenders pulling on all levers to compete. Higher leverage is pushing up purchase multiples in a seller’s market, especially for high quality companies. While a welcome uptick in acquisition activity in the fourth quarter has incited cautious optimism, lenders are anticipating “more of the same” in 2014 with continued pressure on pricing and terms absent a catalyst to materially change loan demand.

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