Loan Rates and Collateral

27 Pages Posted: 31 Aug 2007

See all articles by Aron A. Gottesman

Aron A. Gottesman

Pace University - Lubin School of Business - Department of Finance and Economics

Gordon S. Roberts

York University - Schulich School of Business

Abstract

We investigate the relation between corporate loan spreads and collateralization. We use propensity scoring to create a matched sample of pairs of loan facilities from the Dealscan database. We find that noncollateralized loans are associated with lower spreads even after controlling for risk.

Suggested Citation

Gottesman, Aron A. and Roberts, Gordon S., Loan Rates and Collateral. The Financial Review, Vol. 42, No. 3, pp. 401-427, August 2007. Available at SSRN: https://ssrn.com/abstract=1011280 or http://dx.doi.org/10.1111/j.1540-6288.2007.00177.x

Aron A. Gottesman (Contact Author)

Pace University - Lubin School of Business - Department of Finance and Economics ( email )

One Pace Plaza
New York, NY 10038
United States
212-346-1912 (Phone)
212-346-1573 (Fax)

Gordon S. Roberts

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
416-736-2100 x77953 (Phone)
416-736-5687 (Fax)

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