Multiple lenders and corporate distress: evidence on debt restructuring : [Version Juli 2002]

  • In the recent theoretical literature on lending risk, the common pool problem in multi-bank relationships has been analyzed extensively. In this paper we address this topic empirically, relying on a unique panel data set that includes detailed credit-fie information on distressed lending relationships in Germany. In particular, it includes information on bank pools, a legal institution aimed at coordinating lender interests in borrower distress. We find that the existence of small bank pools increases the probability of workout success and that coordination costs are positively related to pool size. We identify major determinants of pool formation, in particular the distribution of lending shares among banks, the number of banks, and the severity of the distress shock to the borrower.

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Author:Antje Brunner, Jan Pieter KrahnenORCiDGND
Parent Title (English):Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2001,04
Series (Serial Number):CFS working paper series (2001, 04 [Juni 2002])
Publisher:Center for Financial Studies
Place of publication:Frankfurt, M.
Document Type:Working Paper
Year of Completion:2002
Year of first Publication:2002
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2014/08/04
Tag:Bank Lending; Bank Pool; Bankruptcy; Coordination Risk; Distress; Reorganization
GND Keyword:Deutschland; Debt-equity swap; Debt-nature swap; Umschuldung; Kreditrisiko; Bank; Gläubiger; Unternehmenskooperation; Unternehmenszusammenschluss; Krisenmanagement; Unternehmenssanierung; Schätzung
Issue:Juli 2002
Revised version: July 2002. Erste Version unter den Titel: Corporate debt restructuring: Evidence on lender coordination in financial distress
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht