Pipeline Risk in Leveraged Loan Syndication

• 成果类型: Article
• 署名作者: Bruche, Max; Malherbe, Frederic; Meisenzahl, Ralf R.
• 署名单位: Humboldt University of Berlin; University of London; University College London; Center for Economic & Policy Research (CEPR); Federal Reserve System - USA; Federal Reserve Bank - Chicago
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhaa029
• 发表日期: 2020
• 页码: 5660
• 关键词: Securitization; liquidity; MARKET; sales

摘要

What is the economic role played by arrangers of leveraged loans, and what are the risks they face? We provide evidence that arrangers solve a demand discovery problem. Investors have incentives to feign little interest in the loan to obtain better terms. To deter such behavior, arrangers underprice hot deals and ration investors on cold deals. The risk associated with demand discovery is often shared between borrowers and arrangers. One implication is that to ration investors on cold deals, arrangers retain larger loan shares. This motive for retention is different from the monitoring incentive motive previously considered in the literature.