Document Type
Article
Publication Date
11-2007
Abstract
This paper examines the structure and cost of a large sample of bank loans to private firms. Compared to public firms, private firms are more informationally opaque and riskier. The results suggest that the design of a loan to a private firm is significantly different from that to a public firm. Bank loans to private firms are more likely to be by a sole lender, collateralized, and have sweep covenants than loans to public firms. The cost of borrowing is higher for a private firm than for a public firm, even after holding constant firm and loan characteristics.
Journal Title
Financial Markets, Institutions and Instruments
Journal ISSN
0963-8008
Volume
16
Issue
5
First Page
221
Last Page
242
Digital Object Identifier (DOI)
10.1111/j.1468-0416.2007.00125.x
Included in
Accounting Commons, Business Administration, Management, and Operations Commons, Corporate Finance Commons, Finance and Financial Management Commons