Does Borrowing from Banks Cost More than Borrowing from the Market?

• 成果类型: Article
• 署名作者: Schwert, Michael
• 署名单位: University of Pennsylvania
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12849
• 发表日期: 2020
• 页码: 905-947
• 关键词: STRUCTURAL MODELS; corporate-debt; Loan spreads; Credit risk; CHOICE; RENEGOTIATION; securities; reputation

摘要

This paper investigates the pricing of bank loans relative to capital market debt. The analysis uses a novel sample of loans matched with bond spreads from the same firm on the same date. After accounting for seniority, lenders earn a large premium relative to the bond-implied credit spread. In a sample of secured term loans to noninvestment-grade firms, the average premium is 140 to 170 bps or about half of the all-in-drawn spread. This is the first direct evidence of firms' willingness to pay for bank credit and raises questions about the nature of competition in the loan market.