Why Do Firms Borrow Directly from Nonbanks?

• 成果类型: Article
• 署名作者: Chernenko, Sergey; Erel, Isil; Prilmeier, Robert
• 署名单位: Purdue University System; Purdue University; University System of Ohio; Ohio State University; National Bureau of Economic Research; Tulane University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhac016
• 发表日期: 2022
• 页码: 4902
• 关键词: Private debt; bank loans; CHOICE; reputation; covenants; distance

摘要

Analyzing hand-collected credit agreements for a sample of middle-market firms over 2010-2015, we find that one-third of all loans are directly extended by nonbank financial intermediaries. Two-thirds of such nonbank lending can be attributed to bank regulations that constrain banks' ability to lend to unprofitable and highly levered borrowers. Firms with negative EBITDA and debt/EBITDA greater than six are 32% and 15% more likely to borrow from nonbanks. These firms pay significantly higher interest rates, especially following the 2013 leveraged loan guidance revisions. Nonbank borrowers also receive different nonprice terms compared to firms borrowing from banks.