Syndicated Loans

Dennis, Steven A.; Mullineaux, Donald J.

doi:10.1006/jfin.2000.0298

Cited by 401 publications

(214 citation statements)

References 28 publications

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“…11 Bank monitoring and proprietary information generation are at the heart of relationship lending [e.g., Diamond (1984), Ramakrishnan and Thakor (1984), Allen (1990), Rajan (1992), Boot and Thakor (2000), and Boot (2000)]. 12 Suppose that if the lead arranger monitors the borrowing …rm, the …rm exerts e¤ort on its project and thereafter produces a payo¤ of Z > 0 with certainty at the end of the period as the project succeeds with probability 1. That is, the project is a safe one when the lead arranger exerts monitoring e¤ort.…”

Section: An Illustrative Examplementioning

confidence: 99%

“…Another explanation is that reputation concerns of the lead arranger mitigate the agency problems in loan syndication [e.g., Diamond (1991) and Boot, Greenbaum and Thakor (1993)]. Dennis and Mullineaux (2000) show that a loan is more likely to be syndicated as the lead arranger becomes more reputable. Gopalan, Nanda and Yerramilli (2009) further show that the lead arranger su¤ers a loss of reputation following borrower bankruptcies.…”

Section: Introductionmentioning

confidence: 99%

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Competition or Collaboration? The Reciprocity Effect in Loan Syndication

Cai¹

2010

Working Paper (Federal Reserve Bank of Cleveland)

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Section: An Illustrative Examplementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Competition or Collaboration? The Reciprocity Effect in Loan Syndication

Cai¹

2010

Working Paper (Federal Reserve Bank of Cleveland)

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“…5 5 Our paper is also related to the burgeoning literature on syndicated loans which generally have the role of information asymmetry at the heart of the questions they are asking: Why do banks syndicate loans? (Simons (1993), Dennis and Mullineaux (2000)) How does information asymmetry in uence syndicated loan structures? (Lee and Mullineaux (2004), Jones, Lang, and Nigro (2005), Su (2007)) How are syndicated loans priced?…”

Section: Introductionmentioning

confidence: 99%

The Costs of Being Private: Evidence from the Loan Market

2011

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In this paper, we seek to evaluate the relative costs of debt for private versus comparable publicly traded rms. US studies of this important question have been limited due to the absence of comprehensive nancial data on privately-held rms. However, such data is available in the UK. Consequently, we employ a unique dataset of loans taken out by both types of UK rms with a large array of loan and borrower characteristics. We use propensity scores to match private and public companies and nd that private rms pay, on average, 29 to 42bps higher loan spreads than comparable public rms. These ndings are shown to be highly robust across size, opaqueness, relationships, rm age, ownership structure and, importantly, alternative tests that control for endogeneity (ex-post performance, instrumental variable tests and treatment effects models). Consequently, it appears that being private results in debt costs that are signi cantly higher for private rms than public rms and may mitigate some the previously identi ed bene ts of going private.JEL-Classi cation: G21, G22

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“…To limit the powers of the agent, the loan agreement contains an 'agen-77 Cf. Dennis/Mullineaux (2000), p. 408. 78 Cf.…”

mentioning

confidence: 99%