Non-bank investors and loan renegotiations / by Teodoara Paligorova and João A.C. Santos.: FB3-5/2016-60E-PDF
"We document that the structure of syndicates affects loan renegotiations. Lead banks with large retained shares have positive effects on renegotiations. In contrast, more diverse syndicates deter renegotiations, but only for credit lines. The former result can be explained with coordination theories. The puzzling effect of syndicate diversity in term loan renegotiations derives from the growth of collateralized loan obligations (CLOs) in the syndicated loan market and the coordination between these vehicles and lead banks. CLOs that have a relationship with the lead bank of the renegotiated loan are strong supporters of amount-increase renegotiations, arguably because this gives them access to attractive investments. Related CLOs fund not only their portion of the loan increase, but also the portion that was supposed to be funded by the lead bank. Our findings highlight the previously unrecognized role of the growing presence of non-bank lendersin corporate lending"--Abstract, p. ii.
Permanent link to this Catalogue record:
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| Department/Agency | Bank of Canada. |
|---|---|
| Title | Non-bank investors and loan renegotiations / by Teodoara Paligorova and João A.C. Santos. |
| Series title | Staff Working Paper, 1701-9397 ; 2016-60 |
| Publication type | Series - View Master Record |
| Language | [English] |
| Format | Electronic |
| Electronic document | |
| Note(s) | "December 2016." Includes bibliographical references. Includes abstract in French. |
| Publishing information | [Ottawa] : Bank of Canada, c2016. |
| Author / Contributor | Paligorova, Teodora. Santos, João Cabral dos. |
| Description | ii, 53 p. : ill. (most in col.) |
| Catalogue number |
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| Subject terms | Financial institutions Policy Regulation |