|
|
|
|
||||
|
||||
Maturity and Corporate Loan PricingAron A. GottesmanPace University - Lubin School of Business - Department of Finance and Economics Gordon S. RobertsYork University - Schulich School of Business January 10, 2003 EFMA 2003 Helsinki Meetings Abstract: We investigate the relationship between corporate loan spreads and maturity to test whether lenders are compensated for longer maturity loans (tradeoff hypothesis) or limit their exposure by forcing riskier borrowers to take short-term loans (creditquality hypothesis). Earlier studies reject the tradeoff hypothesis. We use the LPC Deal Scan database to create a matched sample of pairs of loans to the same borrower on the same day holding credit quality constant. We perform mean of difference tests, cross sectional and regression analyses, and find evidence supporting both the tradeoff and credit quality hypotheses.
Number of Pages in PDF File: 39 JEL Classification: G21 working papers seriesDate posted: September 6, 2002Suggested CitationContact Information
|
|
|||||||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo3 in 0.438 seconds
