Academic literature on the topic 'Syndicated Loan'
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Journal articles on the topic "Syndicated Loan"
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Fang, Xiaohua, Yutao Li, Baohua Xin, and Wenjun Zhang. "Financial Statement Comparability and Debt Contracting: Evidence from the Syndicated Loan Market." Accounting Horizons 30, no. 2 (March 1, 2016): 277–303. http://dx.doi.org/10.2308/acch-51437.
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SYNOPSIS In this study, we examine whether and how borrowing firms' financial statement comparability affects the contracting features of syndicated loans. Using a sample of loans issued by U.S. public firms in the syndicated loan market over the period 1992–2008, we find strong and robust evidence that financial statement comparability is negatively associated with loan spread and the likelihood of pledging collateral, and positively associated with loan maturity and the likelihood of including performance pricing provisions in loan contracts. We also find that borrowing firms with greater financial statement comparability are able to complete the loan syndication process more swiftly, form loan syndicates enabling the lead lenders to retain smaller percentages of loan shares, and attract a greater number of lenders and, particularly, a greater number of uninformed participating lenders. Altogether, these findings are consistent with the view that financial statement comparability plays an important role in alleviating information asymmetry in the syndicated loan market. JEL Classifications: G12; G14; M41
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Hasan, Iftekhar, Liang Song, Meisong Zhan, Peng Zhang, and Zhaoguo Zhang. "Corporate disclosure and financing arrangements." Asian Review of Accounting 23, no. 2 (July 17, 2015): 139–55. http://dx.doi.org/10.1108/ara-01-2014-0020.
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Purpose – The purpose of this paper is to explore how firms’ disclosure standards influence the syndicated loan market, with an emphasis on loan syndicate structure and composition. Design/methodology/approach – To empirically investigate the effects of corporate disclosure on bank loan syndicate structure and composition, the authors hand-match Dealscan, Worldscope, and other databases and construct a sample across 11 emerging markets. Findings – The authors found that lead banks retain less ownership and form a less-concentrated loan syndicate when borrowers have superior disclosure policies. The authors also concluded that lead banks select more foreign participants in a loan syndicate and these members retain more ownership when borrowers have high disclosure rankings. Finally, the authors present evidence that the relationship between corporate disclosure and bank loan syndicates is more significant for firms with better governance. Originality/value – The findings suggest that corporate disclosure has a significant influence on financing arrangements, even in a weak governance environment.
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Tarasov, A. A. "Arranging the Process of Raising Syndicated Loans." Finance: Theory and Practice 22, no. 6 (December 26, 2018): 121–31. http://dx.doi.org/10.26794/2587-5671-2018-22-6-121-131.
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The article presents the main aspects of organisation, formation and management of a syndicate of banks in the syndicated lending market. A syndicated loan is provided to a borrower by two or more creditor banks on equal terms within one loan documentation package. This market has the following main characteristics: significant amounts of financing; transactions are organised and syndicated by the largest investment and commercial banks; standard legal documentation; centralisation of agency function. The syndication process is a key factor in a successful transaction in the syndicated lending market. The research objective is a structured description of the syndication business process in the credit market. The following tasks have been set and solved: 1) determining the optimal syndication schedule; 2) transactional and legal documents classification; 3) development of methods of risk management of the syndication process. The methodological basis is the process approach to the formation of a syndicate and the role distribution among the bank transaction participants (organisers, underwriters, bookrunners, agents). Based on the regulatory specifics of syndicated lending, legal documents of the process (mandate letter, confidentiality agreement, syndication letters) have been described. The optimal schedule has been proposed to implement a syndicated loan transaction. It includes five stages: 1) planning; 2) formation of a “senior” syndicate; 3) formation of a “common” syndicate; 4) management of the final structure of the syndicate; 5) legal closing of the transaction. Marketing materials (investment presentation, information memorandum) and key transaction activities (press releases publication and bank meeting) have been examined. Key risks of syndicated lending have been defined and described; they include market risk underwriting and funding. From a practical point of view, the article is of interest for representatives of the Russian commercial and investment banks and corporate borrowers who plan to attract corporate financing in the international syndicated lending market.
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Kim, Jeong-Bon, and Byron Y. Song. "Auditor Quality and Loan Syndicate Structure." AUDITING: A Journal of Practice & Theory 30, no. 4 (November 1, 2011): 71–99. http://dx.doi.org/10.2308/ajpt-10144.
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SUMMARY This study investigates whether and how the quality of external auditors hired by borrowers has an impact on loan syndicate structure. Our empirical analyses, using a sample of U.S. syndicated loans from 1996 to 2009, show the following findings: First, a larger number of banks participate in syndicated loans to borrowing firms with Big 4 (or previously Big 5 or Big 6) auditors than to those with non-Big 4 auditors. Second, the percentage of a syndicated loan retained by the lead bank(s) is smaller when the borrower is a client of a Big 4 auditor than when the borrower is a client of a non-Big 4 auditor. Third, the effect of auditor quality (Big 4 versus non-Big 4) on loan ownership structure is less pronounced when lenders are able to gather more information about the borrower prior to the loan deal. Overall, our results suggest that auditor quality plays an important role in loan syndication by alleviating information asymmetries between lead banks and non-lead participant banks. JEL Classifications: G21; G32; M42. Data Availability: Data are publicly available from sources identified in the paper.
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Mugarura, Norman. "The Law relating to syndicated loan agreements and its application in commercial practice." Journal of Financial Regulation and Compliance 24, no. 2 (May 9, 2016): 177–96. http://dx.doi.org/10.1108/jfrc-09-2015-0051.
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Purpose The purpose of this paper is to articulate the law relating to syndicated loan agreements and what legal experts and parties need to safeguard against inherent pitfalls in its usage and practice. The research design of this paper has two strands: an examination of generic issues relating syndicated loan agreements and the process; and the mechanisms for transferring proprietary rights and interests should parties want to do so. Design/methodology/approach The paper was written on the basis of evaluating primary and secondary data sources to gain insights into commercial experiences of harnessing syndicated loan facilities as an alternative form of raising finance for development projects. It has examined case law which reflects the law and practice of syndicated loan markets both in common and civil law jurisdictions. Particular attention has been paid to the credibility of source materials and its relevance to usage and practice of syndicated loan agreements. The core element of this methodology has been an evaluation of generic issues which underpin syndicated loan agreements, analysis of academic literature and evaluation of cases and policy documents. The paper has drawn examples in both common and civil jurisdictions to gain insights into the law which governs syndicated loan markets and its practical application. There has been an uptake in syndicated loan markets not only in United Kingdom but also globally. While there has been a growing body of literature on syndicated loan markets, mechanisms for transferring proprietary rights and interests of contractual parties have not been given proportionate attention. The paper addresses a gap in the law of syndicated loan markets and the varied ways in which they are harnessed in international commercial practice. It addresses existing gaps in the law and practice of syndicated loans, not only in the UK but also in other jurisdictions where examples have been drawn. The research design of this paper has two strands: an examination of generic issues relating loans and the process in which they are constituted as financial products; and the mechanisms for transferring proprietary rights and interests. Findings The findings underscore the fact that much as syndicated loans offer huge advantages to commercial parties, there are also intricacies which parties need to keep in mind and guard against. Like in other forms of commercial agreements, parties to a syndicated loan agreement have the power to nominate the governing law not necessarily from jurisdictions where they do business but as they may see fit. In practice, effective contractual terms in syndicated loans are to be applied slightly differently to other form of commercial agreements in English contract law. For example, representation and warranties are grouped together and constitute statements by the borrower, which the lender considers should be true at the inception of the loan agreement. As a syndicated loan involves the participation of many banks (obviously some foreign banks), there is the potential for conflict of laws. As such, arranging a syndicated loan should be governed by the relating to international commercial contracts to address the challenge posed by conflict of laws. This is essential to ensure proprietary transfer of rights in the asset are properly constituted and effective. The loan should be carefully structured to reflect important technical issues which relate to duties and obligation of contractual parties. Research limitations/implications This was largely a theoretical paper undertaken on the basis of evaluating primary and secondary data sources, some of which were not able to corroborate. It would have been better to corroborate some of the data sources used with financial institutions (which specialise in syndicate loans and related products) to mitigate the potential for bias the data used were generated. Practical implications It is important that legal practitioners and policy markers have access to requisite data on different types of loan markets not only in the UK but also other jurisdictions. One of the most important implication is that unlike bond markets (which are sought in response to an uptake in market risks), the foregoing environment tends to negatively correlate in syndicated loan markets. Lending institutions such as banks tend to be cautious when there are instabilities in the market as demonstrated in the aftermath of the recent global financial crisis (2010-2014). There is a converse relationship between loan markets and syndicated loans, which is explained by the fact that the higher the risks, the more cautious lenders (financial institutions) tend to be to safeguard against uncertainties of ending in an environment which is not conducive for business. Bonds on the other hand are sought as security by credit markets against inherent risks especially in times of economic uncertainties. This is why in the aftermath of the recent global financial crisis, banks were anxious and unwilling to lend not only to each other but also to small business for fear and to curtail potential market risks. It needs to be noted that just like in other forms of international commercial agreements, parties in syndicated loan agreements have autonomy to nominate the governing law of the agreement, not necessarily from jurisdictions where parties do business. Where parties have not nominated the governing law clause of syndicated loan contracts, rules of private international law such as characteristic performance of the contract will apply. Social implications There is a growing body of literature on syndicated loan markets, but one wonders why mechanisms for transferring proprietary rights and interests of contractual parties have not been written about as much. It is an important area but has somehow been overlooked by scholars on this subject. If the borrowers’ fails to keep up their repayments (default), it will have an adverse on loan markets and the economic stability which will in turn affects businesses, people and national governments. Originality/value The paper was written on the basis of evaluating primary and secondary data sources to gain insights into commercial experiences of harnessing syndicated loan facilities as an alternative form of raising finance for development projects. It has examined case law which reflects the law and practice of syndicated loan markets both in common and civil law jurisdictions. Particular attention has been paid to the credibility of source materials and its relevance to usage and practice of syndicated loan agreements. The core element of this methodology has been an evaluation of generic issues which underpin syndicated loan agreements, analysis of academic literature and evaluation of cases and policy documents. The paper has drawn examples in both common and civil jurisdictions to gain insights into the law which governs syndicated loan markets and its practical application.
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Vygovskyy, O. "LEGAL STATUS OF PARTICIPANTS OF INTERNATIONAL SYNDICATED LOAN TRANSACTIONS." ACTUAL PROBLEMS OF INTERNATIONAL RELATIONS 2, no. 127 (2016): 65–72. http://dx.doi.org/10.17721/apmv.2016.127.2.65-72.
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The article reveals legal issues related to the status of participants of international syndicated loan transactions – the arranging bank (lead manager), the agent bank, the banks participating in the international syndicate, the borrower. In particular, the author of the article makes comparison of the legal status of the arranging bank and the agent bank taking into consideration their functions and powers, specifics of relations with other banks and the borrower. Special attention is paid to the liability of the lead manager for the contents of the information memorandum sent to the potential participants of the international syndicate at the preparatory stage. The article also covers specific issues related to use of the international syndicated loan agreement as a single agreement defining the legal basis of interaction of all participants of this transaction, their rights and obligations, liability for violation of the contractual obligations incurred by the participants.
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Chub, D. V. "A Blockchain in Concluding and Administering a Syndicated Loan Agreement." Actual Problems of Russian Law 16, no. 11 (August 26, 2021): 55–64. http://dx.doi.org/10.17803/1994-1471.2021.132.11.055-064.
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A traditional banking market has undergone significant changes caused by rapid development of digital technologies, which has been largely facilitated by the coronavirus pandemic. At the same time, it seems that a blockchain technology has gained great importance in the issuance of syndicated loans. This circumstance is explained by the fact that a syndicated loan agreement, similar to the blockchain technology, traditionally brings together a large number of participants, including, in particular, borrowers, lenders, a loan manager, a mortgage manager. The paper substantiates the advantage of using the blockchain technology in structuring relations related to the provision of a syndicated loan to a borrower. Particular attention is paid to the legal status of a loan manager using blockchain technology to carry out his functions of organizing and administering a syndicated loan agreement. The paper explains the peculiarity of interaction between a credit manager and other parties to the syndicated loan agreement when using blockchain technology. Legislative changes are proposed aimed at providing syndicated lending participants with the opportunity to use blockchain to organize interaction between them.
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Lim, Jongha, Bernadette A. Minton, and Michael S. Weisbach. "Syndicated loan spreads and the composition of the syndicate." Journal of Financial Economics 111, no. 1 (January 2014): 45–69. http://dx.doi.org/10.1016/j.jfineco.2013.08.001.
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Amira, Khaled, and Mark L. Muzere. "Collateral and Yield Spread of Syndicated Loans." Accounting and Finance Research 7, no. 3 (June 27, 2018): 180. http://dx.doi.org/10.5430/afr.v7n3p180.
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We examine factors that influence the use of collateral in syndicated loans and explore debt contract theories under adverse selection and moral hazard. Using a probit model (Agresti, 2007) to analyse syndicated loan data (1987-2007) for firms in the United States, we find that loan and borrower specific factors and general economic conditions as well are significant in explaining the presence of collateral in these loans. Further testing exploring the relationship between collateral and yield spread of syndicated loans while using an econometric procedure (Heckman, 1976; Lee, 1978) to control for the simultaneity between the decision to use collateral and the determination of the yield spread confirms the empirical predictions of the moral hazard debt theory. The use of collateral reduces risk and the cost of borrowing for syndicated loans, providing further clarification to the mixed empirical evidence in the literature.
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Priady, Nicko. "Perlindungan Hukum Terhadap Para Pihak Dalam Perjanjian Kredit Sindikasi." Recital Review 3, no. 2 (December 31, 2021): 216–31. http://dx.doi.org/10.22437/rr.v3i2.12933.
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This study aims to identify and criticize the arrangements, procedures and positions of all parties involved in syndicated financing. The formulation of the problem that will be discussed in this article is about the legal relationship between the parties in a syndicated loan to resolve bad loans when they default, and the legal protection of the parties in a syndicated loan agreement. The type of research is normative law, which is a research method that emphasizes legislation, conceptual law, and case law, and describes theories related to research problems. The results show that the implementation of Syndicated Loans is related to the rights and obligations of the parties. As long as the parties fulfill this and carry out the agreed agreements and carry out supervision simultaneously, the risk of default will be smaller. The regulation regarding the authority and rights and obligations between the Debtor and the Bank in the Syndicated Credit Agreement must be clearly stated in the Syndicated Credit Agreement so that there is no gap in the norm of ambiguity that can cause problems in the future.
Dissertations / Theses on the topic "Syndicated Loan"
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Zhai, Wei. "Essays on the syndicated loan market." Thesis, University of Bristol, 2018. https://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.752775.
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Xiao, Yibo. "ESSAYS ON THE SYNDICATED LOAN MARKET." Diss., Temple University Libraries, 2009. http://cdm16002.contentdm.oclc.org/cdm/ref/collection/p245801coll10/id/60231.
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Business AdministrationPh.D.
The syndicated loan is become more and more important for firm's financing. We study three important aspects of loan syndication: the lead arranger's reputation effect on syndicated loan pricing, the switching behavior for repeat syndicate loans and the effect of country-specific bank-firm ownership structure on syndicated loan pricing and bank-firm relationship of repeat loans. The first chapter analyzes the reputation effect of the lead arranger on syndicated loan pricing, based on a sample of loan facilities to non-financial U.S. firms over the 1994-2006 period. Theory suggests that the reputation/spread relationship should generally be positive because more reputable lenders usually employ more costly loan screening and monitoring techniques and therefore must be compensated with a higher spread. After controlling for endogeneity in lender-borrower matching, the empirical results show that the reputable arrangers charge a "reputation premium" for monitoring and due diligence, and the commitment against extracting the information rent from borrowers. The results also show that the less-reputable arrangers offer a "reputation discount", since the market competition from both the loan market and bond market makes it more difficult for less reputable arrangers to sustain the reputation mechanism. In addition, the reputation effect on pricing becomes less significant when the borrower enters a repeat loan relationship with a prior or existing lender. Finally, the study finds that the arranger's reputation can reduce the lead share retained by the lead arranger in its loan portfolio, which serves as evidence that reputation also mitigates the information asymmetry between the lead arranger and participant banks. The second chapter analyzes the switching behavior for two types of repeat loans: migrating loans that remain within the same bank reputation class and loans migrating to a different reputation class. The theoretical literature argues that banks (lenders) and firms (borrowers) benefit from entering into a relationship-lending arrangement. In the syndicated loan market, however, it is very common for repeat loans to switch from one bank to another. We present a model that establishes conditions for implementing empirical investigations relating to relationship lending and the characteristics of the separating equilibrium in the loan market. Using explanatory variables describing firms, loans, and loan syndicates, we find that lending within the high quality bank sector reveals evidence that is consistent with relationship lending. That is, some firms forego longer maturity loans and less oversight to remain with their original lender. A similar finding does not hold for repeat lending in the lower quality bank sector. Regarding loans that migrate in either direction between the high and low quality banking sectors, firm risk is the most important determinant. Relatively riskier firms move down to lower quality lenders while relatively safer firms move up to higher quality lenders. The third chapter investigates the determinants of loan pricing and repeat loan relationship for a sample of 6,180 non-U.S.. firm-loan observations for the period 1998-2007. This paper focuses on the relation between a country-specific governance indicator and country-specific bank-firm ownership structures on loan pricing and the management of a lending relationship between the syndicate bank and firm. We evaluate the relationship between country-specific bank ownership structure and the main characteristics of loan, which are mainly measured by loan pricing and loan switching decision. The paper examines three interrelated questions: 1.How is loan pricing affected by country-specific bank-firm ownership structure? 2. Does country-specific bank-firm ownership structure influence the decision to switch lenders in the repeat loan market? 3. Is country-specific bank-firm ownership structure more important for a borrower to migrate to a higher reputation lender than to a lower reputation lender? We use loan-characteristic, bank-characteristic, and firm-characteristic variables as well as country-specific corruption and country-specific bank-firm ownership structure variables to explore the effect on loan pricing and loan-switching decisions. Using logistic regression analysis, we find that loan switching is less likely for firms when the bank controls the firm, especially in the case of a bank-controlled firm borrows from a low reputation syndicated loan lender. However, when the firm controls a local bank, there is no impact on the firm's switching decision in the syndicated loan market. The bank-controlling firm is as likely to switch as a firm that does not control a bank even though the firm is more opaque to the financial market. Our results suggest that in the international syndicated loan market, the bank-firm relationship is partly shaped by country-specific characteristics and information asymmetry of firms to the financial market. These chapters explores the bank and firm behavior in the syndicated loan market and make the contribution to the literature by offering further knowledge and deeper understanding about the bank-firm relationship and behavior in the loan syndication structure.
Temple University--Theses
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Stanziola, Irene. "International finance : financing a syndicated loan agreement." Thesis, McGill University, 1986. http://digitool.Library.McGill.CA:80/R/?func=dbin-jump-full&object_id=65524.
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Streitz, Daniel. "Three essays on the syndicated loan market." Doctoral thesis, Humboldt-Universität zu Berlin, Wirtschaftswissenschaftliche Fakultät, 2015. http://dx.doi.org/10.18452/17175.
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Der erste Artikel analysiert den Einfluss von CDS Handel auf Kreditsyndizierung. Theoretisch können CDS sowohl positive wie auch negative Effekte haben. Auf der einen Seite sind CDS flexiblere Risikomanagement-Instrumente als Kredit Verkäufe. Auf der andern Seite kann ein Kreditgeber nicht glaubhaft versichern einen Kreditnehmer zu überwachen, wenn Kreditrisiko anonym mit CDS abgelegt werden kann (moral hazard). Wir finden, dass Kreditgeber signifikant höhere Anteile an Krediten halten, wenn CDS auf das Fremdkapital des Kreditnehmers gehandelt werden. Wir finden keine Evidenz für moral hazard. Der zweite Artikel untersucht den Einfluss von Manager Optimismus auf die Verwendung von performance-abhängigen Vertragsklauseln in Kreditverträgen (PSD). Gegeben ihrer verzerrten Erwartungen über die zukünftige Performance der Firma könnten optimistische Manager PSD als günstige Finanzierungsmöglichkeit ansehen. Wir finden, dass optimistische Manager mehr PSD nutzen und schlechter nach der Ausgabe von PSD performen als rationale Manager. Der dritte Artikel untersucht, ob PSD genutzt werden kann um hold-up Probleme in langfristigen Kreditbeziehungen zu verringern. Wir finden, dass PSD mehr in Hausbankbeziehungen genutzt wird – insbesondere wenn der Kreditnehmer wenig alternative Finanzierungsmöglichkeiten besitzt. Des Weiteren finden wir einen Substitutionseffekt zwischen der Stärkte von Finanz-Covenants und der Nutzung von PSD. Diese Resultate stützen die Hypothese, dass PSD genutzt wird um hold-up Probleme zu mindern.The first paper analyzes the impact of credit default swap (CDS) trading on loan syndication. Theoretically, CDS can have both positive and negative effects. One the one hand, CDS are a flexible risk management tool and can therefore replace loan sales (risk management). On the other hand, lenders can no longer credibly commit to monitor a borrower if laying off credit risk anonymously via CDS is possible making loan sales costly (moral hazard). We find that lenders retain significantly higher shares of loans once CDS are actively traded on a borrower’s debt. We find no evidence for moral hazard. The second paper examines the impact of managerial optimism on the inclusion of performance-pricing provisions in debt contracts (PSD). Given their upwardly biased expectations about the firm''s future cash flow, optimistic managers may view PSD as a relatively cheap form of financing. We find that optimistic managers are more likely to issue PSD. Consistent with their biased expectations, firms with optimistic managers perform worse than firms with rational managers after issuing PSD. The third paper examines if PSD is used to reduce hold- up problems in long-term lending relationships. We find that the use of PSD is more common in the presence of a long-term lending relationship and if the borrower has fewer financing alternatives available. Further, we find a substitution effect between the use of PSD and the tightness of financial covenants. This result also supports our hypothesis that hold-up concerns motivate the use of PSD.
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Wild, William. "The economic basis of syndicated lending." Thesis, Queensland University of Technology, 2004. https://eprints.qut.edu.au/16114/1/William_Wild_Thesis.pdf.
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This work undertakes the first comprehensive theoretical assessment of syndicated loans. It is shown that syndicated and bilateral (single lender) loans should be good substitutes in meeting a borrower's financing requirements, but that syndicated loans are more complex and impose additional risks to the parties in the way they are arranged. The existing explantions of loan syndication - that they are hybrids of private bank loans and public debt instruments, that syndication is a portfolio management tool,
and that loans are syndicated where they are too large to be provided bilaterally - are unable to substantially explain both the nature of syndicated loans and practice in the loan markets. A rigorous new explanation is developed, which shows that syndication reduces the rate of lending costs, so that the return to the loan originator is greater, and the borrower's cost of financing is lower, where a loan is syndicated rather than provided bilaterally. This explanation is shown to hold in competitive loan markets and to be consistent with the observation that syndicated loans are generally larger than other loans. Incidental to this new explanation, new expressions of the return to a bank from providing a loan on a bilateral basis and from originating a syndicated
loan are also developed. New algorithms are also developed for determining the distribution
of the commitments from syndicate participants and thus the originator's final hold, the amount it must lend itself, where the loan is underwritten. This provides, for the first time, a rigorous basis for assessing the expected return, and the risk, for the originator of a given syndicated loan. Finally, empirical testing finds that a bank's observed lending history is significant to its decision to participate in a new syndicated loan but that predictions of participation, which are fundamental inputs into the final hold algorithms, based on this information have relatively little power. It follows that
there is competitive advantage to loan originators that have access to other, private
information on potential participants' lending intentions.
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Wild, William. "The economic basis of syndicated lending." Queensland University of Technology, 2004. http://eprints.qut.edu.au/16114/.
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This work undertakes the first comprehensive theoretical assessment of syndicated loans. It is shown that syndicated and bilateral (single lender) loans should be good substitutes in meeting a borrower's financing requirements, but that syndicated loans are more complex and impose additional risks to the parties in the way they are arranged. The existing explantions of loan syndication - that they are hybrids of private bank loans and public debt instruments, that syndication is a portfolio management tool,
and that loans are syndicated where they are too large to be provided bilaterally - are unable to substantially explain both the nature of syndicated loans and practice in the loan markets. A rigorous new explanation is developed, which shows that syndication reduces the rate of lending costs, so that the return to the loan originator is greater, and the borrower's cost of financing is lower, where a loan is syndicated rather than provided bilaterally. This explanation is shown to hold in competitive loan markets and to be consistent with the observation that syndicated loans are generally larger than other loans. Incidental to this new explanation, new expressions of the return to a bank from providing a loan on a bilateral basis and from originating a syndicated
loan are also developed. New algorithms are also developed for determining the distribution
of the commitments from syndicate participants and thus the originator's final hold, the amount it must lend itself, where the loan is underwritten. This provides, for the first time, a rigorous basis for assessing the expected return, and the risk, for the originator of a given syndicated loan. Finally, empirical testing finds that a bank's observed lending history is significant to its decision to participate in a new syndicated loan but that predictions of participation, which are fundamental inputs into the final hold algorithms, based on this information have relatively little power. It follows that
there is competitive advantage to loan originators that have access to other, private
information on potential participants' lending intentions.
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Karamanolis, Padazis Orestes. "The legal implications of sovereign lending through syndicated loan agreements." Thesis, University of Cambridge, 1988. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.304287.
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Schmidt, Daniel. "Corporate syndicated loan pricings in Germany : an exploration of the hidden drivers." Thesis, University of Gloucestershire, 2017. http://eprints.glos.ac.uk/4809/.
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Syndicated loans are a common debt financing format for large corporations in general. For those situated in Germany—with its bank-based financial system—such loans play a vital role. Given the multibillion volumes raised annually, the pricing of syndicated loans is economically significant, with its levels, structure, and determination having attracted the interest of researchers around the world. A critical review of the existing worldwide literature of syndicated loan pricing revealed notable gaps, including an almost complete absence of studies on the German corporate market. The overall research aim was to address this gap by exploring and analysing the “hidden drivers” of banks’ pricing of syndicated loans to German corporate borrowers, thereby developing an enriched understanding of the elements and determinants of pricing and its underlying processes and decisions. Adopting a pragmatist research paradigm, I chose a sequential mixed-methods approach, with a limited quantitative analysis preceding an extensive qualitative study. The first stage of the research was designed to evaluate the availability of reliable quantitative pricing data in the public domain—this being the main data source for the clear majority of extant studies. I found the availability and quality of pricing data for the German corporate market to be extremely limited, particularly in comparison to that available relating to the U.S. market. There was clearly much that remained unexplained; hence, primary research was required to illuminate syndicated loan pricing and the decision processes that contribute to it. The main element of the qualitative study was a series of semi-structured, in-depth interviews with a sample of bank lending professionals and key informants. The purpose of these interviews was to explore the complex realities of syndicated lending through the eyes and experiences of the people involved and to interpret the socially constructed phenomena surrounding the pricing of German corporate syndicated loans. The study succeeded in revealing and substantiating important and to date hidden phenomena concerning numerous dimensions of syndicated lending in general and pricing in particular. An explanation was developed for the relative opacity of the German corporate syndicated loan market. The study enabled significant enhancements to the understanding of the concept of pricing and its complex and interwoven elements. More broadly, a new and richer perspective was developed of syndicated lending as a behavioural phenomenon, involving a complex interplay of relationships and strategies, and involving individuals and departments within banks, between banks as members of the syndicate, and between lenders and borrowers. The insights gained informed the development of a comprehensive model of the pricing elements of syndicated lending and their determinants. This research is the first to conduct and produce an in-depth study of the internal workings of syndicated corporate lending in the German market and a study that does not rely on secondary data that are at best incomplete. It has resulted in many rich and original insights and a conceptualisation of syndicated lending that differs radically from the classical understanding of lender-borrower relationships as founded on theories of asymmetric information. The research presented here, therefore, makes significant contributions to the literature, in helping to close notable gaps in the banking and financial intermediation literature.
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Maskara, Pankaj Kumar. "TWO ESSAYS ON BORROWING FROM BANKS AND LENDING SYNDICATES." UKnowledge, 2007. http://uknowledge.uky.edu/gradschool_diss/529.
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A loan deal is often composed of several components (for example, a 3-year revolving loan, a 10-year secured senior term loan, and a 5-year subordinated term loan). The division of a deal into two or more components, each with different risk characteristics, is called tranching. This study recognizes the importance of tranching and establishes tranching as an integral component of a syndicated loan structure. In the first essay, we present a model to explain the economic value of tranching and show that riskier firms are more likely to take loans with multiple tranches. Therefore, the average credit spread on syndicated loans with multiple tranches is higher than that on nontranched loans. However, after accounting for the risk characteristics of a tranched loan, we show that a given tranche of a multi-tranche loan, on average, has a lower credit spread than an otherwise similar loan that is not part of a multi-tranche loan. We also show that the benefits of tranching accrue primarily to borrowers with speculative debt ratings. Prior studies have found an abnormal stock return of 100 to 150 basis points for firms that announce they have borrowed funds from a bank. Despite some conflicting evidence (Peterson and Rajan, 2002; Thomas and Wang, 2004; Billett, Flannery and Garfinkel, 2006), the literature tends to interpret this positive bank loan announcement effect as the markets response to the mitigation of information asymmetry regarding the borrowing firm caused by the certification role of the lending banks who act as quasi-insiders. In the second essay, we document that a strong selection bias exists in prior studies. We show that less than a quarter of the loans made by banks are ever announced by borrowing firms and the loans that are announced are systematically different from loans that are never announced by the firms. Firms with low debt ratings, firms with zero or negative profits but positive interest expense, firms that take large loans in relation to their assets base, firms with little analyst following, and firms with high forecasted EPS growth are more likely to announce their loans. We show that while there was a positive announcement effect over the period 1987 to 1995, loan announcements elicited zero or negative returns in the last ten years as the mix of companies announcing loans changed over time.
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Steffen, Sascha. "The role of private information in financial contracting : evidence from the syndicated loan market /." [S.l. : s.n.], 2007. http://www.gbv.de/dms/zbw/558861342.pdf.
Full textBooks on the topic "Syndicated Loan"
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The law of multi-bank financing: Syndicated loans and the secondary loan market. Oxford: Oxford University Press, 2007.
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Mugasha, A. The law of multi-bank financing: Syndicated loans and the secondary loan market. Oxford: Oxford University Press, 2007.
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Armstrong, Jim. The syndicated loan market: Developments in the North American context. Ottawa: Bank of Canada, 2003.
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Altunbaş, Yener, Blaise Gadanecz, and Alper Kara. Syndicated Loans. London: Palgrave Macmillan UK, 2006. http://dx.doi.org/10.1057/9780230597235.
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Blaise, Gadanecz, and Kara Alper 1977-, eds. Syndicated loans: A hybrid of relationship lending and publicly traded debt. New York: Palgrave Macmillan, 2006.
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Bond, I. D. The syndicated credits market. London: Economics Division, Bank of England, 1985.
Find full textBook chapters on the topic "Syndicated Loan"
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Altunbaş, Yener, Blaise Gadanecz, and Alper Kara. "Comparison of Syndicated Loan Markets with Bond Markets." In Syndicated Loans, 126–61. London: Palgrave Macmillan UK, 2006. http://dx.doi.org/10.1057/9780230597235_7.
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Altunbaş, Yener, Blaise Gadanecz, and Alper Kara. "Banks’ and Financial Institutions’ Decision to Participate in Loan Syndications." In Syndicated Loans, 101–25. London: Palgrave Macmillan UK, 2006. http://dx.doi.org/10.1057/9780230597235_6.
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Chatterjee, Charles. "Negotiating Techniques in Arranging Project Finance and Syndicated Loan Agreements." In Negotiating Techniques in Diplomacy and Business Contracts, 87–115. Cham: Springer International Publishing, 2021. http://dx.doi.org/10.1007/978-3-030-81732-9_7.
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Altunbaş, Yener, Blaise Gadanecz, and Alper Kara. "Introduction." In Syndicated Loans, 1–5. London: Palgrave Macmillan UK, 2006. http://dx.doi.org/10.1057/9780230597235_1.
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Altunbaş, Yener, Blaise Gadanecz, and Alper Kara. "Concluding Remarks." In Syndicated Loans, 206–9. London: Palgrave Macmillan UK, 2006. http://dx.doi.org/10.1057/9780230597235_10.
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Altunbaş, Yener, Blaise Gadanecz, and Alper Kara. "A Global Overview of the Syndicated Loans Market." In Syndicated Loans, 6–14. London: Palgrave Macmillan UK, 2006. http://dx.doi.org/10.1057/9780230597235_2.
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Altunbaş, Yener, Blaise Gadanecz, and Alper Kara. "Historical Analysis, 1970–2004." In Syndicated Loans, 15–33. London: Palgrave Macmillan UK, 2006. http://dx.doi.org/10.1057/9780230597235_3.
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Altunbaş, Yener, Blaise Gadanecz, and Alper Kara. "Borrower-Country Economic Structure and the Pricing of Syndicated Loans." In Syndicated Loans, 34–70. London: Palgrave Macmillan UK, 2006. http://dx.doi.org/10.1057/9780230597235_4.
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Altunbaş, Yener, Blaise Gadanecz, and Alper Kara. "Lender Behaviour and the Structure and Pricing of Syndicated Loans." In Syndicated Loans, 71–100. London: Palgrave Macmillan UK, 2006. http://dx.doi.org/10.1057/9780230597235_5.
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Altunbaş, Yener, Blaise Gadanecz, and Alper Kara. "Syndicated Loans and the Financing of Distressed Emerging Markets." In Syndicated Loans, 162–82. London: Palgrave Macmillan UK, 2006. http://dx.doi.org/10.1057/9780230597235_8.
Full textConference papers on the topic "Syndicated Loan"
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Rajin, Danica, and Tijana Radojević. "MODEL OF FINANCIAL REPORTING ACCORDING TO THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT AFTER THE APPROVAL OF SYNDICATED LOAN." In FINIZ 2014. Belgrade, Serbia: Singidunum University, 2014. http://dx.doi.org/10.15308/finiz-2014-52-55.
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de Novellis, Gennaro, Paola Musile Tanzi, and Elena Stanghellini. "A Systemic Risk Indicator for Leveraged Finance Exposure in the Banking System." In Challenges in Economics and Business in the Post-COVID Times. University of Maribor Press, 2022. http://dx.doi.org/10.18690/um.epf.5.2022.19.
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In recent years, the context of the banking system,characterised by expansive monetary policies, has boosted the investments in leveraged loans. The COVID-19 pandemic brought the first real slowdown of the global economy since the financial crisis of 2007-08, and the growth of the leveraged loan market has been subject to significant attention from the competent authorities. Banks have remained solid despite the adverse outlook, however, the banking landscape continues to be impacted by the uncertainty relating to the evolution of the pandemic. The original sample for this paper, made up of leveraged loans, combines instrument-specific information with information on financial borrowing and the composition of the syndicate of banks/lenders. The aim of the paper is to identify a systemic risk indicator that takes into account the concentration of credit risk within each bank. For this purpose, using an Mquantile regression, it is possible to obtain an indicator (Mquantile coefficient) for each bank that varies between 0 and 1, where higher values indicate the greater presence of risky leveraged loans in that specific bank. Combined with an indicator of loan sharing between banks, this also allows a graphical representation of the network of banks in this specific market.
Reports on the topic "Syndicated Loan"
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Lim, Jongha, Bernadette Minton, and Michael Weisbach. Syndicated Loan Spreads and the Composition of the Syndicate. Cambridge, MA: National Bureau of Economic Research, September 2012. http://dx.doi.org/10.3386/w18356.
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Kaminsky, Graciela. Crises and Sudden Stops: Evidence from International Bond and Syndicated-Loan Markets. Cambridge, MA: National Bureau of Economic Research, August 2008. http://dx.doi.org/10.3386/w14249.
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Giannetti, Mariassunta, and Ralf R. Meisenzahl. Ownership Concentration and Performance of Deteriorating Syndicated Loans. Federal Reserve Bank of Chicago, 2021. http://dx.doi.org/10.21033/wp-2021-10.
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Eichengreen, Barry, and Ashoka Mody. Lending Booms, Reserves, and the Sustainability of Short-Term Debt: Inferences from the Pricing of Syndicated Bank Loans. Cambridge, MA: National Bureau of Economic Research, May 1999. http://dx.doi.org/10.3386/w7113.
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