Department

Economics, Finance and Quantitative Analysis

Document Type

Article

Publication Date

8-2018

Embargo Period

7-17-2020

Abstract

Using a sample of syndicated loans to private equity (PE)-backed IPO companies, we examine how a third-party bank relationship influences the syndicate structure of a loan. We find that a stronger relationship between the lead bank and the borrower’s PE firm enables the lead bank to retain a smaller share of the loan and form a larger and less concentrated syndicate, especially when the borrower is less transparent. A stronger PE-bank relationship also attracts greater foreign bank participation. Our findings suggest that the lead bank’s relationship with a large equity holder of the borrower facilitates information production in lending.

Journal

The Financial Review

Journal ISSN

0732-8516

Volume

53

Issue

3

Comments

Preprint available 2 years from publication.


Can be found here: https://financialreview.poole.ncsu.edu/wp-content/uploads/2017/07/53_1_2.pdf

Available for download on Friday, July 17, 2020

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