Duration of loan arrangement and syndicate organization
AbstractWhat is the influence of syndicate organization on the duration of loan arrangement? I answer this question using the 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 and therefore for borrower satisfaction regarding the speed of obtaining the necessary funding. A syndicate organization 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 shorter when the lenders diversity in terms of nationality is weaker.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 10953.
Date of creation: Sep 2008
Date of revision:
Syndicated loan; syndication process; duration of loan arrangement; agency costs; reputation; experience; nationality; survival analysis;
Find related papers by JEL classification:
- F30 - International Economics - - International Finance - - - General
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
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