Abstract

http://ssrn.com/abstract=2138209
 
 

Citations (3)



 


 



Syndicated Loan Spreads and the Composition of the Syndicate


Jongha Lim


California State University - Fullerton

Bernadette A. Minton


Ohio State University (OSU) - Department of Finance

Michael S. Weisbach


Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER)

May 28, 2013

Fisher College of Business Working Paper No. 2012-03-015
Charles A. Dice Center Working Paper No. 2012-15

Abstract:     
During the past decade non-bank institutional investors are increasingly taking larger roles in the corporate lending than they historically have played. These non-bank institutional lenders typically have higher required rates of return than banks, but invest in the same loan facilities. In a sample of 20,031 leveraged loan facilities originated between 1997 and 2007, facilities including a non-bank institution in their syndicates have higher spreads than otherwise identical bank-only facilities. Contrary to risk-based explanations of this finding, non-bank facilities are priced with premia relative to bank-only facilities in the same loan package. These non-bank premia are substantially larger when a hedge or private equity fund is one of the syndicate members. Consistent with the notion that firms are willing to pay a premium when loan facilities are particularly important to them, the non-bank premia are larger when borrowing firms face financial constraints and when capital is less available from banks.

Number of Pages in PDF File: 51

Keywords: hedge funds, syndicated loans, spread premiums

JEL Classification: G21, G23, G32

working papers series


Download This Paper

Date posted: August 29, 2012 ; Last revised: May 28, 2013

Suggested Citation

Lim, Jongha and Minton, Bernadette A. and Weisbach, Michael S., Syndicated Loan Spreads and the Composition of the Syndicate (May 28, 2013). Fisher College of Business Working Paper No. 2012-03-015. Available at SSRN: http://ssrn.com/abstract=2138209 or http://dx.doi.org/10.2139/ssrn.2138209

Contact Information

Jongha Lim
California State University - Fullerton ( email )
SGMH 5170
Fullerton, CA 92831
United States
657-278-7987 (Phone)
Bernadette A. Minton
Ohio State University (OSU) - Department of Finance ( email )
2100 Neil Avenue
Columbus, OH 43210-1144
United States
614-688-3125 (Phone)
614-292-2359 (Fax)

Michael S. Weisbach (Contact Author)
Ohio State University (OSU) - Department of Finance ( email )
2100 Neil Avenue
Columbus, OH 43210-1144
United States

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 745
Downloads: 200
Download Rank: 85,509
Citations:  3

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.297 seconds