Journal article 180 views
Lead arranger reputation and the structure of loan syndicates
Sajid Chaudhry,
Stefanie Kleimeier
Journal of International Financial Markets, Institutions and Money
Swansea University Author: Sajid Chaudhry
Abstract
This study explores the effects of information asymmetry and arranger reputations on syndicated loan structures. The moral hazard problem arising from information asymmetries between borrowers and a syndicate can be overcome only by the most reputable arrangers. Both moral hazard and adverse selecti...
| Published in: | Journal of International Financial Markets, Institutions and Money |
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| Published: |
2015
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| URI: | https://cronfa.swan.ac.uk/Record/cronfa21878 |
| Abstract: |
This study explores the effects of information asymmetry and arranger reputations on syndicated loan structures. The moral hazard problem arising from information asymmetries between borrowers and a syndicate can be overcome only by the most reputable arrangers. Both moral hazard and adverse selection problems appear when arrangers have an information advantage over other syndicate participants. However, the adverse selection problem arises only when low-reputation arrangers lend to opaque borrowers. |
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| Keywords: |
Syndicated loans, syndicate structure, information asymmetry, reputation. |
| College: |
Faculty of Humanities and Social Sciences |