Assessing Buyer Power in Syndicated Loans

28 Pages Posted: 6 May 2019

See all articles by Emin Köksal

Emin Köksal

Bahcesehir University

Sahin Ardiyok

BASEAK Attorney Partnership

Date Written: April 4, 2019


Bu yazının Türkçe versiyonu şurada bulunabilir:

The main purpose of this study is to examine the buyer power of the borrowers at the multilateral loan market including the syndicated and club loans. Although there has not been a formal definition yet for the buyer power concept in the antitrust economics literature, it may be described as the power that is exercised by the buyers on market transactions. In some markets, it is observed that not the sellers but the buyers may exercise their power on market prices and/or quantities. Corporate multilateral loan market is one of those markets, mostly because of the characteristics of the borrowers which are large and financially sound companies.

In this study, the analysis done for the multilateral loan market are based on the assessment of the borrowers’ buyer power and the lenders’ market power. While on one side the competitive conditions in the market and market power of lenders have been elaborated, on the other side factors that determine the buyer power of borrowers have been assessed. The study also provides a specific analysis for Turkish companies in multilateral loan market and their buyer power.

Through reviewing the relevant scientific literature and based on the data, the study put the following findings concerning the buyer power of borrowers in multilateral (syndicated/club) loans:

• Company characteristics -such as, company size, publicly available information and domestic/foreign ownership- are the most important determinants for the choice of debt instruments. Companies and financial institutions may reach alternative borrowing tools based on their characteristics.

• Credit quality of some large companies -called blue-chips- enable them to directly access to the international capital markets and gives them bargaining power over lenders in multilateral loan market. This proves the significance buyer power of such companies in multilateral loan market.

• Our analysis for the Turkish borrowers in multilateral loan market shows that Turkish companies have considerable buyer power because of the following reasons: (1) In Turkey the demand side of the multilateral loan market is shallow and concentrated, (2) the number of potential buyers for multilateral loans have been stable, (3) Turkish companies may switch to other debt instruments in case of cost increases.

Based on the above findings and facts, we argue that a proper competition analysis which assesses the multilateral loan market -including syndicated and club loans- should consider the buyer power of borrowers as a significant factor.

Keywords: Buyer power, antitrust, competition law, syndicated loans, corporate finance

JEL Classification: L40, G30

Suggested Citation

Köksal, Emin and Ardiyok, Sahin, Assessing Buyer Power in Syndicated Loans (April 4, 2019). Available at SSRN: or

Emin Köksal (Contact Author)

Bahcesehir University ( email )

Ciragan Cd. No:4
Istanbul, 34353
2123810000 (Phone)

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Sahin Ardiyok

BASEAK Attorney Partnership ( email )

Büyükdere Caddesi Bahar Sokak No.13
River Plaza Kat 11-12
Istanbul, 34394
+90 212 329 30 85 (Phone)

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