Monitoring, Financial Distress, and the Structure of Commercial Lending Syndicates
We examine the size and composition of commercial lending syndicates. Syndicates are smaller and more concentrated when there is little information about the borrower, when credit risk is relatively high, and when a loan is secured. This suggests syndicates are structured to enhance monitoring efforts and to facilitate renegotiation if borrowers become financially distressed. Since loan sales can change a syndicate’s structure, lead banks often constrain such activity. Limiting resales results in larger, more diffuse syndicates at the loan origination stage, however. Syndicates also grow larger and more diffuse when arrangers are more reputable, when loans have longer terms to maturity, and when borrowers hold more growth options. Our results are robust in a sample restricted to borrowers with traded equity or with credit ratings. The findings for composition likewise are robust when we control for potential endogeneity bias and for the influence of syndicate size on composition.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 33 (2004)
Issue (Month): 3 (Fall)
|Contact details of provider:|| Postal: |
Web page: http://www.fma.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:fma:fmanag:leemullineaux04. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Courtney Connors)The email address of this maintainer does not seem to be valid anymore. Please ask Courtney Connors to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.