The Determinants of Risky Loans: Evidence from Syndicated Loans

다국어 초록 (Multilingual Abstract)

Although each bank in a syndicate is ultimately responsible for its own credit analysis, the arranger is responsible for analyzing the credit quality of the borrower and negotiating the key terms of a loan contract. Also, in a best efforts bid, the arranger underwrites some portion of loan and thus takes on the risk if the market does not accept the deal. To compensate for the service and risk, the arranger and other members of the lead management team earn some form of upfront fee, which is one element of the syndicated loan price. I estimate a model that addresses the upfront fees of syndicated loans originated in Korea, employing a sample of 122 facilities. I find empirical evidence that issues of potential moral hazard and borrower reputation affect the level of upfront fee that the borrower is supposed to pay to the arranger. Also, other factors reflecting the relevance of monitoring costs and borrower's profitability have an impact on the fee structure of borrowing.

참고문헌 (Reference)

1 "Theory of the Firm Journal of Financial Economics" 305-360, 1976

2 "The Value of Financial Intermediaries Empirical Evidence from Syndicated Loans to Emerging" 2004

3 "The Choice between Bank Loans and Privately-Placed Debt Journal of Political Economy" 689-721, 1991

4 "Syndicated Loans" 9 : 404-426, 2000

5 "Syndicated Loan Announcements and the Market Value of the Banking Firm" 27 : 457-475, 1995

6 "Syndicated Lending Closes Out '90S on a Tear" 165 (165): 2000

7 "On the Pricing of Corporate Debt The Risk Structure of Interest Rates Journal of Finance" 449-70, 1974

8 "Monitoring, Financial Distress, and the Composition of Commercial Lending Syndicates" 33 : 107-130, 2004

9 "Journal of Financial Economics" 25-41, 1992

10 "Infor- mation Asymmetry, Monitoring and the Placement Structure of Corpo- rate Debt" 51 : 407-434, 1999

11 "Federal Reserve Bank of Boston" 45-52, 1993

12 "Determinants of Secondary Market Prices for Developing Country Syndicated Loans Journal of Finance" 1517-1540, 1990

13 "Determinants of Corporate Borrowing Journal of Financial Economics" 147-175, 1977

14 "Borrower Risk and the Price and Nonprice Terms of Bank Loans" Federal Reserve Bank of New York 1999

15 "Banking Relationships and the Effect of Monitoring on Loan Pricing" 20 : 275-289, 1997

16 "Bank Monitoring and the Pricing of Corporate Public Debt" 51 : 435-449, 1999

17 "Bank Information Monopolies and the Mix of Private and Public Debt Claims" 51 : 18631889-, 1996

18 "Bank Borrowers and Loan Sales: New Evidence on the Uniqueness of Bank Loans" 76 : 563-582, 2003

19 "An Investigation of Cost Diffe- rences between Public Sales and Private Placements of Debt Journal of Financial Economics" 253-278, 1988

20 "An Empirical Analysis of the Determinants of Corporate Debt Ownership Structure" 32 : 47-69, 1997