Contracting in the Dark: The rise of public-side lenders in the syndicated loan market

• 成果类型: Article
• 署名作者: Amiraslani, Hami; Donovan, John; Phillips, Matthew A.; Wittenberg-Moerman, Regina
• 署名单位: INSEAD Business School; University of Notre Dame; Massachusetts Institute of Technology (MIT); University of Southern California
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2023.101586
• 发表日期: 2023
• 关键词: accounting information; private information; bank reputation; Price discovery; RENEGOTIATION; covenants; dissemination; INVESTMENT; interests; benefits

摘要

We document a novel trend in syndicated lending where some participants voluntarily waive their rights to borrowers' private information. We posit that public-side lending emerged to facilitate broad lender participation in the syndicated loan market by miti-gating concerns about the leakage of borrowers' private information into public securities markets. In line with this proposition, we find that public-side lending facilitates the loan market participation of lenders for which maintaining robust information barriers is particularly costly. Furthermore, while public-side lending increases within-syndicate in-formation asymmetry, our findings indicate that it does not materially increase interest spreads and is associated with lower coordination costs among syndicate participants. Collectively, we document how debt contracting practices evolved to address frictions associated with the protection of borrowers' private information and the related changes in loan contracting equilibria.& COPY; 2023 Elsevier B.V. All rights reserved.