Lending Relationships and Loan Contract Terms

• 成果类型: Article
• 署名作者: Bharath, Sreedhar T.; Dahiya, Sandeep; Saunders, Anthony; Srinivasan, Anand
• 署名单位: University of Michigan System; University of Michigan; Georgetown University; New York University; National University of Singapore; National University of Singapore
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhp064
• 发表日期: 2011
• 页码: 1141
• 关键词: debt maturity; financial intermediation; asymmetric information; RELATIONSHIP BANKING; credit; determinants; reputation; regression; distress; benefits

摘要

We find that repeated borrowing from the same lender translates into a 10-17 bps lowering of loan spreads and that relationships are especially valuable when borrower transparency is low. These results hold using multiple approaches (propensity score matching, instrumental variables, and treatment effects model) that control for the endogeneity of relationships. We also provide a demarcation line between relationship and transactional lending. Spreads charged for relationship loans and nonrelationship loans are statistically identical if the borrower is in the largest 30% by asset size; has public rated debt; or is part of the S&P 500 index. Past relationships reduce collateral requirements and are also associated with obtaining larger loans. Our results imply that, even for firms that have multiple sources of outside financing, borrowing from a prior lender obtains better loan terms. (JEL D82, G30, G20, G21, G24, L14, N20)