Duration of Loan Arrangement and Syndicate Structure

39 Pages Posted: 28 Jun 2008

See all articles by Christophe J. Godlewski

Christophe J. Godlewski

University of Strasbourg - Faculty of Law and Business; EM Strasbourg Business School; LaRGE Research Center

Date Written: June 27, 2008

Abstract

What is the influence of syndicate structure on the duration of loan arrangement? I answer this question using survival analysis methodology on a sample of loans from 59 countries over the 1992-2006 period. I find that syndicate size, concentration, reputation, and national diversity clearly matters for the duration of loan arrangement. A syndicate structure adapted to specific agency problems of syndication, with numerous, reputable, and experienced arrangers retaining a larger portion of the loan reduces the duration. The latter is also reduced when the syndicate has numerous lenders acting as syndicate "managers'' from the same country as the borrower. Furthermore, more same-country "managers" and participants allow to shorten the duration of loan arrangement.

Keywords: Syndicated loan, syndication process, duration of loan arrangement, agency costs, reputation, experience, nationality, survival analysis

JEL Classification: F30, G15, G21, G32, C41

Suggested Citation

Godlewski, Christophe J., Duration of Loan Arrangement and Syndicate Structure (June 27, 2008). Available at SSRN: https://ssrn.com/abstract=1152726 or http://dx.doi.org/10.2139/ssrn.1152726

Christophe J. Godlewski (Contact Author)

University of Strasbourg - Faculty of Law and Business ( email )

1 place d'Athènes
Strasbourg, 67000
France

HOME PAGE: http://droit.unistra.fr/

EM Strasbourg Business School ( email )

61 Avenue de la Forêt Noire
Strasbourg, 67000
France

HOME PAGE: http://www.em-strasbourg.eu/

LaRGE Research Center ( email )

1 place d'Athènes
Strasbourg, 67000
France

HOME PAGE: http://droit.unistra.fr/

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