Why borrowers pay premiums to larger lenders: Empirical evidence from sovereign syndicated loans

Research, Preprint English OPEN
Hallak, Issam;
  • Publisher: Goethe University, Center for Financial Studies (CFS) Frankfurt a. M.
  • Subject: F34 | G33 | G21 | Sovereign Debt | Relationship Lending; Number of Lenders; Syndicated loans; Sovereign Debt | Relationship Lending | Syndicated Loans | Number of Lenders | Relationship Lending,Number of Lenders,Syndicated Loans,Sovereign Debt
    • jel: jel:F34 | jel:G33 | jel:G21
      ddc: ddc:330

All other terms being equal (e.g. seniority), syndicated loan contracts provide larger lending compensations (in percentage points) to institutions funding larger amounts. This paper explores empirically the motivation for such a price design on a sample of sovereign sy... View more
  • References (32)
    32 references, page 1 of 4

    Berglöf, E., G. Roland and E.-L. von Thadden, 2000, An Incomplete Contracts Approach to Corporate Bankruptcy, Manuscript, April.

    Billett, M. T., M. J. Flannery, and J. A. Garfinkel, 1995, The Effect of Lender Identity on a Borrowing Firm's Equity Return, The Journal of Finance 50(2), 699-718.

    Bolton, P. and D.S. Scharfstein, 1996, Optimal Debt Structure and the Number of Creditors, Journal of Political Economy, 104 (1), 1-25.

    Boot, A., 2000, Relationship Banking: What Do We Know? Journal of Financial Intermediation 9, 7-25.

    Brunner, A. and J.P. Krahnen, 2001, Corporate Debt Restructuring: Evidence on Lender Coordination in Financial Distress, Center for Financial Studies Working Paper, No. 2001/04.

    Bulow, J. and K. Rogoff, 1989, Sovereign Debt : Is to Forgive to Forget?, American Economic Review 79, March, 43-50.

    Cole, H.L., J. Dow and W.B. English, 1995, Default, Settlement, and Signalling: Lending Resumption in a Reputation Model of Sovereign Debt, International Economic Review 36 (2), May, 365-85.

    Datta, S., M. Iskandar-Datta and A. Patel, 1999, Bank Monitoring and the Pricing of Corporate Public Debt, Journal of Financial Economics 51, 435-449.

    Dennis, S. and D.J. Mullineaux, 2000, Syndicated Loans, Journal of Financial Intermediation 9 (4), October, 404-26.

    Diamond, D. W., 1991, Monitoring and Reputation: the Choice between Bank Loans and Direct Placed Debt, Journal of Political Economy, Vol. 99, August, 689-721.

  • Metrics
Share - Bookmark