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The syndicate structure of securitized corporate loans

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  • Zhengfeng Guo
  • Shage Zhang

Abstract

Securitized loans have lower lead bank shares, but larger shares held by non‐CLO (collateralized loan obligation) institutional investors than nonsecuritized loans. The result can largely be explained by their degree of information asymmetry and credit risk. We find that lead banks increase their holdings after a nonsecuritized loan becomes securitized, but they do not reduce financial exposure to securitized facilities during the boom of the CLO market. Furthermore, we find that securitized loans do not perform differently from similar nonsecuritized loans. We conclude that differences in syndicate structure are likely shaped by participants’ investment preference rather than a manifestation of adverse selection.

Suggested Citation

  • Zhengfeng Guo & Shage Zhang, 2020. "The syndicate structure of securitized corporate loans," The Financial Review, Eastern Finance Association, vol. 55(1), pages 61-89, February.
    • Handle: RePEc:bla:finrev:v:55:y:2020:i:1:p:61-89
    DOI: 10.1111/fire.12203
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    Cited by:

    1. Giorgio Caselli & Catarina Figueira, 2023. "Monetary policy, ownership structure, and risk‐taking at financial intermediaries," The Financial Review, Eastern Finance Association, vol. 58(1), pages 167-191, February.
    2. de Jong, Abe & Kooijmans, Tim & Veld, Chris, 2022. "Legal risk and information spillover through private lender reports," Journal of Financial Markets, Elsevier, vol. 60(C).
    3. Müller, Isabella & Nguyen, Huyen & Nguyen, Trang, 2024. "Carbon transition risk and corporate loan securitization," IWH Discussion Papers 22/2022, Halle Institute for Economic Research (IWH), revised 2024.

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