Banking relationship and syndicated loans during the last financial crisis
Banking relationship has been showed to be important in lending, especially in small business lending. Few studies focus on banking relationship in syndicated loan, although they have became a major way of financing. The last financial crisis has clearly shown credit rationing, and credit conditions tightening, even in syndicated loans market. We investigate whether banking relationship helps firms to benefit from better syndicated loans terms in a chaotic financial environment. Using a sample of syndicated loans issued in 2008 in North America and Europe, and records of syndicated loans since 2003, we find that firms that had developed a previous relationship with an investment bank obtained a lower spread and for longer maturity during the financial crisis but did not benefit from greater loan facilities.
|Date of creation:||Jun 2011|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.dauphine.fr/en/welcome.html|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Besanko & Anjan V. Thakor, 2004.
"Competitive Equilibrium in the Credit Market under Asymmetric Information,"
- Besanko, David & Thakor, Anjan V., 1987. "Competitive equilibrium in the credit market under asymmetric information," Journal of Economic Theory, Elsevier, vol. 42(1), pages 167-182, June.
- Ivashina, Victoria & Scharfstein, David, 2010. "Bank lending during the financial crisis of 2008," Journal of Financial Economics, Elsevier, vol. 97(3), pages 319-338, September.
- Ayako Yasuda, 2005. "Do Bank Relationships Affect the Firm's Underwriter Choice in the Corporate-Bond Underwriting Market?," Journal of Finance, American Finance Association, vol. 60(3), pages 1259-1292, 06.
- Pegaret Pichler & William Wilhelm, 2001. "A Theory of the Syndicate: Form Follows Function," OFRC Working Papers Series 2001fe05, Oxford Financial Research Centre.
- Maskara, Pankaj Kumar, 2010. "Economic value in tranching of syndicated loans," Journal of Banking & Finance, Elsevier, vol. 34(5), pages 946-955, May.
- Webb, David C, 1992. "Two-Period Financial Contracts with Private Information and Costly State Verification," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 1113-23, August.
- Yener Altunbas & Blaise Gadanecz, 2003.
"Developing country economic structure and the pricing of syndicated credits,"
BIS Working Papers
132, Bank for International Settlements.
- Yener Altunbas & Blaise Gadanecz, 2004. "Developing Country Economic Structure and the Pricing of Syndicated Credits," Journal of Development Studies, Taylor & Francis Journals, vol. 40(5), pages 143-173.
- Diamond, Douglas W, 1989.
"Reputation Acquisition in Debt Markets,"
Journal of Political Economy,
University of Chicago Press, vol. 97(4), pages 828-62, August.
- William Wilhelm & Pegaret Pichler, 2001. "A Theory of the Syndicate: Form Follows Function," Economics Series Working Papers 2001-FE-05, University of Oxford, Department of Economics.
- Shane A. Corwin & Paul Schultz, 2005. "The Role of IPO Underwriting Syndicates: Pricing, Information Production, and Underwriter Competition," Journal of Finance, American Finance Association, vol. 60(1), pages 443-486, 02.
- Schmidt-Mohr, Udo, 1997. "Rationing versus collateralization in competitive and monopolistic credit markets with asymmetric information," European Economic Review, Elsevier, vol. 41(7), pages 1321-1342, July.
- Ewert, Ralf & Schenk, Gerald, 1998. "Determinants of bank lending performance," CFS Working Paper Series 1998/06, Center for Financial Studies (CFS).
- Steven A. Sharpe, 1989.
"Asymmetric information, bank lending, and implicit contracts: a stylized model of customer relationships,"
Finance and Economics Discussion Series
70, Board of Governors of the Federal Reserve System (U.S.).
- Sharpe, Steven A, 1990. " Asymmetric Information, Bank Lending, and Implicit Contracts: A Stylized Model of Customer Relationships," Journal of Finance, American Finance Association, vol. 45(4), pages 1069-87, September.
- Pegaret Pichler, 2001. "A Theory of the Syndicate: Form Follows Function," Journal of Finance, American Finance Association, vol. 56(6), pages 2237-2264, December.
- Maretno Harjoto & Donald J. Mullineaux & Ha-Chin Yi, 2006. "A Comparison of Syndicated Loan Pricing at Investment and Commercial Banks," Financial Management, Financial Management Association International, vol. 35(4), pages 49-70, December.
When requesting a correction, please mention this item's handle: RePEc:dau:papers:123456789/8559. 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: (Alexandre Faure)
If references are entirely missing, you can add them using this form.