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Bonds and syndicated loans during the Covid-19 crisis: decoupled again?

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  • Tirupam Goel
  • José María Serena Garralda

Abstract

Borrowing by non-financial firms in global debt markets surged following the Covid-19 shock. Bond issuance boomed, while syndicated loan originations trailed. Led by easier access to bond markets, large firms significantly increased their borrowing. The rest of the firms faced bottlenecks due to their reliance on a strained syndicated loan market and hurdles in switching to bond markets. Large firms, which had lower cash buffers pre-crisis than smaller firms, used part of the fresh credit to raise their buffers in addition to meeting liquidity shortfalls.

Suggested Citation

  • Tirupam Goel & José María Serena Garralda, 2020. "Bonds and syndicated loans during the Covid-19 crisis: decoupled again?," BIS Bulletins 29, Bank for International Settlements.
    • Handle: RePEc:bis:bisblt:29
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    References listed on IDEAS

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    1. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(3), pages 393-414.
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    Cited by:

    1. Jagriti Srivastava & Aravind Sampath & Balagopal Gopalakrishnan, 2021. "Is CSR the key to unlocking debt financing during COVID-19? A multicountry perspective," Working papers 481, Indian Institute of Management Kozhikode.
    2. Ryan Banerjee & José-María Serena, 2021. "Dampening the financial accelerator? direct lenders and monetary policy," Working Papers 2201, Banco de España.
    3. Srivastava, Jagriti & Sampath, Aravind & Gopalakrishnan, Balagopal, 2022. "Is ESG the key to unlock debt financing during the COVID-19 pandemic? International evidence," Finance Research Letters, Elsevier, vol. 49(C).
    4. Kaboski, Joseph & Huneeus, Federico & Larrain, Mauricio & Schmukler, Sergio & Vera, Mario, 2022. "The Distribution of Crisis Credit: Effects on Firm Indebtedness and Aggregate Risk," CEPR Discussion Papers 17061, C.E.P.R. Discussion Papers.
    5. Irving Fisher Committee, 2021. "New developments in central bank statistics around the world," IFC Bulletins, Bank for International Settlements, number 55, July.
    6. Gopalakrishnan, Balagopal & Jacob, Joshy & Mohapatra, Sanket, 2022. "COVID-19 pandemic and debt financing by firms: Unravelling the channels," Economic Modelling, Elsevier, vol. 114(C).

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