The Price and Quality of Arranging Services in Syndicated Lending

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dc.contributor Aalto University en
dc.contributor Aalto-yliopisto fi
dc.contributor.advisor Suominen, Matti Lohi, Pauli 2018-11-19T13:00:12Z 2018-11-19T13:00:12Z 2018
dc.description.abstract PURPOSE OF THE STUDY The objective of this thesis is to find out the implications of bank’s reputation on syndicated loan arranging services. The criteria on how the companies select the lead arranger of the syndicate is investigated. Moreover, the thesis models the quality and pricing of arrangement service separately for the reputable and less-reputable banks, and seeks an answer to the question whether higher reputation leads in better quality and higher price of the service. DATA AND METHODOLOGY The study employs a dataset consisting of 4221 separate loan tranches without geographical limitations. The loan data is collected from SDC Platinum and complemented with borrower accounting data obtained from Thomson Reuters. To test the hypotheses, I employ a two-stage regression with an endogenous switch to control for the endogenous effects in lead arranger selection. RESULTS The empirical results show that borrower-arranger matching is non-random and that the reputable and less-reputable bank groups are specialized for different clienteles. The reputable banks tend to arrange larger, more complex and more risky loan packages while providing superior quality among those loans. However, I do not find significant evidence of quality-premium in form of upfront fees charged. The less-reputable banks serve less-risky, though more-opaque, local companies with smaller financing needs and provide superior quality for those clients over the reputable banks. en
dc.format.extent 49 + 4
dc.language.iso en en
dc.title The Price and Quality of Arranging Services in Syndicated Lending en
dc.type G2 Pro gradu, diplomityö fi Kauppakorkeakoulu fi School of Business en
dc.contributor.department Rahoituksen laitos fi
dc.subject.keyword syndicated loans en
dc.subject.keyword arranging fees en
dc.subject.keyword intermediary reputation en
dc.subject.keyword banking en
dc.identifier.urn URN:NBN:fi:aalto-201811195802
dc.type.ontasot Master's thesis en
dc.type.ontasot Maisterin opinnäyte fi
dc.programme Finance en
dc.subject.helecon rahoitus fi
dc.subject.helecon pankit fi
dc.subject.helecon luotto fi
dc.subject.helecon lainat fi
dc.subject.helecon palvelut fi
dc.subject.helecon laatu fi
dc.subject.helecon palkkiot fi
dc.subject.helecon maine fi
dc.ethesisid 17304
dc.location P1 I fi
local.aalto.electroniconly yes
local.aalto.openaccess no

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