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Duration of loan arrangement and syndicate organization

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  • Godlewski, Christophe

Abstract

What 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 Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 10953.

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Date of creation: Sep 2008
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Handle: RePEc:pra:mprapa:10953

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

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