Lead arranger reputation and the structure of loan syndicates

S.M. Chaudhry; S. Kleimeier

doi:10.1016/j.intfin.2015.05.021

Lead arranger reputation and the structure of loan syndicates

S.M. Chaudhry, S. Kleimeier^*

^*Corresponding author for this work

Finance

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

This study explores the effects of information asymmetry and arranger reputations on syndicated loan structures. The moral hazard problem arising from information asymmetries between borrower and syndicate can be overcome only by the most reputable arrangers. Both moral hazard and adverse selection problems appear when arrangers have an information advantage over other syndicate participants. However, the adverse selection problem arises only when low-reputation arrangers lend to opaque borrowers. (C) 2015 Elsevier B.V. All rights reserved.

Original language	English
Pages (from-to)	116-126
Number of pages	11
Journal	Journal of International Financial Markets, Institutions & Money
Volume	38
DOIs	https://doi.org/10.1016/j.intfin.2015.05.021
Publication status	Published - Sept 2015

Keywords

Syndicated loans
Syndicate structure
Information asymmetry
Reputation
LENDING RELATIONSHIPS
CREDIT
RISK
TERMS

Access to Document

10.1016/j.intfin.2015.05.021

Cite this

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KW - Syndicated loans

KW - Syndicate structure

KW - Information asymmetry

KW - Reputation

KW - LENDING RELATIONSHIPS

KW - CREDIT

KW - RISK

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