Taking the lead: when non-banks arrange syndicated loans
- In the mid-1990s, institutional investors entered the syndicated loan market and started to serve borrowers as lead arrangers. Why are non-banks able to compete for this role against banks? How do the composition of syndicates and loan pricing differ among lead arrangers? By using a dataset of 12,847 leveraged loans between 1997 and 2012, I aim to answer these questions. Non-banks benefit from looser regulatory requirements, have industry expertise which helps them in the screening and monitoring of borrowers and focus on firms that ask for loans only instead of additional cross-selling of other services. I can show that non-banks specialize on more opaque and less experienced borrowers, are more likely than banks to choose participants that help to reduce potentially higher information asymmetries and earn 105 basis points more than banks.
| Author: | Marcel Grupp |
|---|---|
| URN: | urn:nbn:de:hebis:30:3-374450 |
| URL: | http://ssrn.com/abstract=2602196 |
| DOI: | https://doi.org/10.2139/ssrn.2602196 |
| Parent Title (English): | SAFE working paper series ; No. 100 |
| Series (Serial Number): | SAFE working paper (100) |
| Publisher: | SAFE |
| Place of publication: | Frankfurt am Main |
| Document Type: | Working Paper |
| Language: | English |
| Date of Publication (online): | 2015/05/05 |
| Date of first Publication: | 2015/05/05 |
| Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
| Release Date: | 2015/05/19 |
| Tag: | Non-bank lead arrangers; spread premium; syndicated loans |
| Issue: | This Version: April 2015 |
| Page Number: | 71 |
| HeBIS-PPN: | 35958845X |
| Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
| Wissenschaftliche Zentren und koordinierte Programme / House of Finance (HoF) | |
| Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) | |
| Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE) | |
| Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Sammlungen: | Universitätspublikationen |
| Licence (German): |  Deutsches Urheberrecht |
