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How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
How to get a syndicated loan fast?
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How to get a syndicated loan fast?

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  • 1. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion How to get a syndicated loan fast ? The role of syndicate composition and organization Christophe J. Godlewski University of Strasbourg & EM Strasbourg Business School LaRGE Research Center FMA European Conference 2009, Torino, ItalyChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 1/ 23
  • 2. Introduction Loan syndication process Empirical design Methodology Data Results ConclusionOutline 1 Introduction 2 Loan syndication process 3 Empirical design 4 Methodology 5 Data 6 Results 7 ConclusionChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 2/ 23
  • 3. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Syndicated loan = loan granted jointly and under common terms (single agreement) by a group of banks to a borrowerChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 3/ 23
  • 4. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Syndicated loan = loan granted jointly and under common terms (single agreement) by a group of banks to a borrower Global syndicated lending market has reached 4.5 trillion USD and 8,300 issues in 2007 (Thomson Financial, 2007)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 3/ 23
  • 5. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Syndicated loan = loan granted jointly and under common terms (single agreement) by a group of banks to a borrower Global syndicated lending market has reached 4.5 trillion USD and 8,300 issues in 2007 (Thomson Financial, 2007) Important source of external finance: e.g. more than 50% of total corporate financing in USChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 3/ 23
  • 6. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Major advantage of syndicated loans for borrowers: speed of the syndication process (transaction cycle) (time between launching the syndication and deal activation) ⇔ quick access to fundsChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 4/ 23
  • 7. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Major advantage of syndicated loans for borrowers: speed of the syndication process (transaction cycle) (time between launching the syndication and deal activation) ⇔ quick access to funds Also important for lenders (especially arrangers): speed of the syndication process = reputation signalChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 4/ 23
  • 8. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Major advantage of syndicated loans for borrowers: speed of the syndication process (transaction cycle) (time between launching the syndication and deal activation) ⇔ quick access to funds Also important for lenders (especially arrangers): speed of the syndication process = reputation signal How to get a syndicated loan fast ?Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 4/ 23
  • 9. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Drawback of syndicated lending: potential specific agency problemsChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 5/ 23
  • 10. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Drawback of syndicated lending: potential specific agency problems Informational frictions between senior (arrangers) and junior (participants) members of the syndicateChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 5/ 23
  • 11. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Drawback of syndicated lending: potential specific agency problems Informational frictions between senior (arrangers) and junior (participants) members of the syndicate Delegation of the monitoring duty by the syndicate members to the arranger = syndication agentChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 5/ 23
  • 12. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Drawback of syndicated lending: potential specific agency problems Informational frictions between senior (arrangers) and junior (participants) members of the syndicate Delegation of the monitoring duty by the syndicate members to the arranger = syndication agent Monitoring effort unobservable ⇒ Moral hazard problemChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 5/ 23
  • 13. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Drawback of syndicated lending: potential specific agency problems Informational frictions between senior (arrangers) and junior (participants) members of the syndicate Delegation of the monitoring duty by the syndicate members to the arranger = syndication agent Monitoring effort unobservable ⇒ Moral hazard problem Arranger collects private information (previous relationship / due diligence) ⇒ arranger = informed lenderChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 5/ 23
  • 14. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Drawback of syndicated lending: potential specific agency problems Informational frictions between senior (arrangers) and junior (participants) members of the syndicate Delegation of the monitoring duty by the syndicate members to the arranger = syndication agent Monitoring effort unobservable ⇒ Moral hazard problem Arranger collects private information (previous relationship / due diligence) ⇒ arranger = informed lender If information cannot be credibly communicated to the participants or verified by them ⇒ Adverse selection problemChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 5/ 23
  • 15. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Syndicate composition and organization ⇒ mitigate agency problems (Pichler and Wilhelm, 2001; Lee and Mullineaux, 2004; Jones et al., 2005; Gopalan et al., 2007; Ross, 2007; Sufi, 2007; Gatti et al., 2008; Panyagometh and Roberts, 2008)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 6/ 23
  • 16. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Syndicate composition and organization ⇒ mitigate agency problems (Pichler and Wilhelm, 2001; Lee and Mullineaux, 2004; Jones et al., 2005; Gopalan et al., 2007; Ross, 2007; Sufi, 2007; Gatti et al., 2008; Panyagometh and Roberts, 2008) Small, concentrated, experienced and reputable syndicates ⇔ more adapted to tackle agency costsChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 6/ 23
  • 17. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Syndicate composition and organization ⇒ mitigate agency problems (Pichler and Wilhelm, 2001; Lee and Mullineaux, 2004; Jones et al., 2005; Gopalan et al., 2007; Ross, 2007; Sufi, 2007; Gatti et al., 2008; Panyagometh and Roberts, 2008) Small, concentrated, experienced and reputable syndicates ⇔ more adapted to tackle agency costs Eisenhardt (1989), Talaulicar et al. (2005), Kocher and Sutter (2006), Schulte and Gruner (2007): ⋆ Informational frictions (syndication agency problems) ⇒ speed of decision making (syndication process duration) ⋆ Team organization (syndication composition and organization) ⇒ speed of decision making (syndication process duration)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 6/ 23
  • 18. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Syndication agency problems ⇔ syndication composition and organization ⇔ syndication process durationChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 7/ 23
  • 19. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Syndication agency problems ⇔ syndication composition and organization ⇔ syndication process duration AIM = empirical investigation of the influence of syndication composition and organization on the duration of a syndication processChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 7/ 23
  • 20. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Syndication agency problems ⇔ syndication composition and organization ⇔ syndication process duration AIM = empirical investigation of the influence of syndication composition and organization on the duration of a syndication process Cross-country frameworkChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 7/ 23
  • 21. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Syndication agency problems ⇔ syndication composition and organization ⇔ syndication process duration AIM = empirical investigation of the influence of syndication composition and organization on the duration of a syndication process Cross-country framework Survival analysis techniquesChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 7/ 23
  • 22. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Growing empirical literature: Focus = pricing, syndication decision, syndicate organization, reputationChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 8/ 23
  • 23. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Growing empirical literature: Focus = pricing, syndication decision, syndicate organization, reputation Syndicate organization: Lee and Mullineaux (2004), Song (2004), Jones et al. (2005), Bosch and Steffen (2006), Champagne and Kryzanowski (2007), Fran¸ois and Missonier-Piera (2007), c Sufi (2007), Godlewski (2008)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 8/ 23
  • 24. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Growing empirical literature: Focus = pricing, syndication decision, syndicate organization, reputation Syndicate organization: Lee and Mullineaux (2004), Song (2004), Jones et al. (2005), Bosch and Steffen (2006), Champagne and Kryzanowski (2007), Fran¸ois and Missonier-Piera (2007), c Sufi (2007), Godlewski (2008) Syndicated loan pricing: Nini (2004), Harjoto et al. (2006), Carey and Nini (2007), Focarelli et al. (2008), Fungacova et al. (2009), Ivashina (2009)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 8/ 23
  • 25. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Growing empirical literature: Focus = pricing, syndication decision, syndicate organization, reputation Syndicate organization: Lee and Mullineaux (2004), Song (2004), Jones et al. (2005), Bosch and Steffen (2006), Champagne and Kryzanowski (2007), Fran¸ois and Missonier-Piera (2007), c Sufi (2007), Godlewski (2008) Syndicated loan pricing: Nini (2004), Harjoto et al. (2006), Carey and Nini (2007), Focarelli et al. (2008), Fungacova et al. (2009), Ivashina (2009) Syndication decision: Dennis and Mullineaux (2000), Altunbas et al. (2005), Godlewski and Weill (2008)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 8/ 23
  • 26. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Growing empirical literature: Focus = pricing, syndication decision, syndicate organization, reputation Syndicate organization: Lee and Mullineaux (2004), Song (2004), Jones et al. (2005), Bosch and Steffen (2006), Champagne and Kryzanowski (2007), Fran¸ois and Missonier-Piera (2007), c Sufi (2007), Godlewski (2008) Syndicated loan pricing: Nini (2004), Harjoto et al. (2006), Carey and Nini (2007), Focarelli et al. (2008), Fungacova et al. (2009), Ivashina (2009) Syndication decision: Dennis and Mullineaux (2000), Altunbas et al. (2005), Godlewski and Weill (2008) Reputation: Gopalan et al. (2007), Ross (2007), Panyagometh and Roberts (2008)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 8/ 23
  • 27. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 1. Pre-mandated stage (details of transaction are discussed)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 9/ 23
  • 28. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 1. Pre-mandated stage (details of transaction are discussed) Borrower solicits competitive offers to arrange and manage the syndication with one or more banks (usually main relationship banks)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 9/ 23
  • 29. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 1. Pre-mandated stage (details of transaction are discussed) Borrower solicits competitive offers to arrange and manage the syndication with one or more banks (usually main relationship banks) From the proposals borrower chooses one or more arrangers to form a syndicate and negotiate a preliminary loan agreementChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 9/ 23
  • 30. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 1. Pre-mandated stage (details of transaction are discussed) Borrower solicits competitive offers to arrange and manage the syndication with one or more banks (usually main relationship banks) From the proposals borrower chooses one or more arrangers to form a syndicate and negotiate a preliminary loan agreement Arranger’s duties = negotiation of key loan terms with the borrower, production of an information memorandum, appointment of participants and structuring of the syndicateChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 9/ 23
  • 31. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 2. Post-mandated stage (syndication / negotiation of facility agreement)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 10/ 23
  • 32. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 2. Post-mandated stage (syndication / negotiation of facility agreement) Critical stage because both parties (borrower and arrangers) are at riskChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 10/ 23
  • 33. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 2. Post-mandated stage (syndication / negotiation of facility agreement) Critical stage because both parties (borrower and arrangers) are at risk Preparation of a information memorandum for potential participants (produced collectively by the arranger and the borrower / contains information about the borrower and the deal)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 10/ 23
  • 34. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 2. Post-mandated stage (syndication / negotiation of facility agreement) Critical stage because both parties (borrower and arrangers) are at risk Preparation of a information memorandum for potential participants (produced collectively by the arranger and the borrower / contains information about the borrower and the deal) Set of targeted participants determined by the arrangerChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 10/ 23
  • 35. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 2. Post-mandated stage (syndication / negotiation of facility agreement) Critical stage because both parties (borrower and arrangers) are at risk Preparation of a information memorandum for potential participants (produced collectively by the arranger and the borrower / contains information about the borrower and the deal) Set of targeted participants determined by the arranger Organization of a roadshow ⇒ presentation and discussion of the information memorandum + announcement of closing fees + establishment of a timetable for commitmentsChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 10/ 23
  • 36. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 2. Post-mandated stage (syndication / negotiation of facility agreement) Critical stage because both parties (borrower and arrangers) are at risk Preparation of a information memorandum for potential participants (produced collectively by the arranger and the borrower / contains information about the borrower and the deal) Set of targeted participants determined by the arranger Organization of a roadshow ⇒ presentation and discussion of the information memorandum + announcement of closing fees + establishment of a timetable for commitments Formal invitations of targeted participantsChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 10/ 23
  • 37. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 3. Post-signing stage (operational)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 11/ 23
  • 38. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 3. Post-signing stage (operational) Deal becomes activeChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 11/ 23
  • 39. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 3. Post-signing stage (operational) Deal becomes active Loan is operationalChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 11/ 23
  • 40. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion 3. Post-signing stage (operational) Deal becomes active Loan is operational Debt contract is bindingChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 11/ 23
  • 41. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Duration of syndication process measured in days from the launching date until the completion dayChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 12/ 23
  • 42. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Duration of syndication process measured in days from the launching date until the completion day Launching date Completion date t0 t1 Pre−mandated stage Post−mandated stage Active deal Figure: The sequence of events and stages of a loan syndication transaction cycle (duration).Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 12/ 23
  • 43. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Duration of syndication process measured in days from the launching date until the completion day Launching date Completion date t0 t1 Pre−mandated stage Post−mandated stage Active deal Figure: The sequence of events and stages of a loan syndication transaction cycle (duration). Focus on the influence of syndicate composition and organization on the duration of a syndication processChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 12/ 23
  • 44. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Duration of syndication process measured in days from the launching date until the completion day Launching date Completion date t0 t1 Pre−mandated stage Post−mandated stage Active deal Figure: The sequence of events and stages of a loan syndication transaction cycle (duration). Focus on the influence of syndicate composition and organization on the duration of a syndication process Various proxy variables for size, concentration, experience, reputation, nationalitiesChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 12/ 23
  • 45. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.1 Syndicate composition and organization variables Variable Description Mean SignChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 13/ 23
  • 46. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.1 Syndicate composition and organization variables Variable Description Mean Sign Number of Number of arrangers in the syndicate 3.60 - arrangersChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 13/ 23
  • 47. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.1 Syndicate composition and organization variables Variable Description Mean Sign Number of Number of arrangers in the syndicate 3.60 - arrangers Concentration of Normalized Herfindal-Hirschman Index 0.24 - arrangers of loan shares held by arrangersChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 13/ 23
  • 48. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.1 Syndicate composition and organization variables Variable Description Mean Sign Number of Number of arrangers in the syndicate 3.60 - arrangers Concentration of Normalized Herfindal-Hirschman Index 0.24 - arrangers of loan shares held by arrangers Top 10 arrangers % of the syndicate arrangers in the top 0.69 - (presence) 10-th centile of the most frequent arrangersChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 13/ 23
  • 49. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.1 Syndicate composition and organization variables Variable Description Mean Sign Number of Number of arrangers in the syndicate 3.60 - arrangers Concentration of Normalized Herfindal-Hirschman Index 0.24 - arrangers of loan shares held by arrangers Top 10 arrangers % of the syndicate arrangers in the top 0.69 - (presence) 10-th centile of the most frequent arrangers Top 10 arrangers % of the syndicate arrangers in the top 0.07 - (market) 10-th centile in market share of loansChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 13/ 23
  • 50. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.1 Syndicate composition and organization variables Variable Description Mean Sign Number of Number of arrangers in the syndicate 3.60 - arrangers Concentration of Normalized Herfindal-Hirschman Index 0.24 - arrangers of loan shares held by arrangers Top 10 arrangers % of the syndicate arrangers in the top 0.69 - (presence) 10-th centile of the most frequent arrangers Top 10 arrangers % of the syndicate arrangers in the top 0.07 - (market) 10-th centile in market share of loans League table % of the syndicate arrangers in the 0.21 - arrangers Global League Table (LPC, Reuters)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 13/ 23
  • 51. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.2 Syndicate composition and organization variables (cont.) Variable Description Mean SignChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 14/ 23
  • 52. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.2 Syndicate composition and organization variables (cont.) Variable Description Mean Sign Same country % of the syndicate “top lenders” (agent / arranger) 0.31 +/- top lenders from the same country as the borrowerChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 14/ 23
  • 53. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.2 Syndicate composition and organization variables (cont.) Variable Description Mean Sign Same country % of the syndicate “top lenders” (agent / arranger) 0.31 +/- top lenders from the same country as the borrower Same country % of the syndicate “mid lenders” (manager) 0.92 +/- mid lenders from the same country as the borrowerChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 14/ 23
  • 54. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.2 Syndicate composition and organization variables (cont.) Variable Description Mean Sign Same country % of the syndicate “top lenders” (agent / arranger) 0.31 +/- top lenders from the same country as the borrower Same country % of the syndicate “mid lenders” (manager) 0.92 +/- mid lenders from the same country as the borrower Same country % of the syndicate “mid” and “low” (participant) 0.86 +/- mid-low lenders lenders from the same countryChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 14/ 23
  • 55. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.2 Syndicate composition and organization variables (cont.) Variable Description Mean Sign Same country % of the syndicate “top lenders” (agent / arranger) 0.31 +/- top lenders from the same country as the borrower Same country % of the syndicate “mid lenders” (manager) 0.92 +/- mid lenders from the same country as the borrower Same country % of the syndicate “mid” and “low” (participant) 0.86 +/- mid-low lenders lenders from the same country Same country % of the syndicate “top” and “low” 0.09 +/- top-low lenders lenders from the same countryChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 14/ 23
  • 56. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.2 Syndicate composition and organization variables (cont.) Variable Description Mean Sign Same country % of the syndicate “top lenders” (agent / arranger) 0.31 +/- top lenders from the same country as the borrower Same country % of the syndicate “mid lenders” (manager) 0.92 +/- mid lenders from the same country as the borrower Same country % of the syndicate “mid” and “low” (participant) 0.86 +/- mid-low lenders lenders from the same country Same country % of the syndicate “top” and “low” 0.09 +/- top-low lenders lenders from the same country + Control variables: loan size, spread, fee, maturity, guarantors, covenants, debt seniority, rating, loan type, loan purposes, benchmark rates, year, geographical area and industry dummies + legal risk (LLSV index for creditor rights and rule of law)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 14/ 23
  • 57. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Dependent variable = duration of a loan syndication process ⇒ survival analysisChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 15/ 23
  • 58. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Dependent variable = duration of a loan syndication process ⇒ survival analysis T = duration of a loan syndication processChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 15/ 23
  • 59. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Dependent variable = duration of a loan syndication process ⇒ survival analysis T = duration of a loan syndication process Survival probability S(t) = probability that the syndication process lasts from the time origin (launching date) to a future time t: S(t) = Prob(T ≥ t) = 1 − F (t), (1) where F (t) is the cumulative distribution function for T .Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 15/ 23
  • 60. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Dependent variable = duration of a loan syndication process ⇒ survival analysis T = duration of a loan syndication process Survival probability S(t) = probability that the syndication process lasts from the time origin (launching date) to a future time t: S(t) = Prob(T ≥ t) = 1 − F (t), (1) where F (t) is the cumulative distribution function for T . Hazard h(t) = rate of transition of the loan syndication process duration to completion, given it has not been completed before ⇔ instantaneous event rate for the syndication process which has already lasted to time tChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 15/ 23
  • 61. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Dependent variable = duration of a loan syndication process ⇒ survival analysis T = duration of a loan syndication process Survival probability S(t) = probability that the syndication process lasts from the time origin (launching date) to a future time t: S(t) = Prob(T ≥ t) = 1 − F (t), (1) where F (t) is the cumulative distribution function for T . Hazard h(t) = rate of transition of the loan syndication process duration to completion, given it has not been completed before ⇔ instantaneous event rate for the syndication process which has already lasted to time t Prob(t ≤ T < t + ∆t|T ≥ t) f (t) h(t) = lim∆t→0 = , (2) ∆t S(t) where f (t) is the probability density function of TChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 15/ 23
  • 62. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Parametric survival models ⇒ accelerated failure time (AFT) models (assumption of hazards’ proportionality is violated in our case)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 16/ 23
  • 63. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Parametric survival models ⇒ accelerated failure time (AFT) models (assumption of hazards’ proportionality is violated in our case) Effect of a predictor is to alter the rate at which the syndication process proceeds along time axisChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 16/ 23
  • 64. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Parametric survival models ⇒ accelerated failure time (AFT) models (assumption of hazards’ proportionality is violated in our case) Effect of a predictor is to alter the rate at which the syndication process proceeds along time axis Natural logarithm of the survival time ln(t) is expressed as a linear function of the covariates X : ln(t) = α + X ′ β + ǫ, (3) where α is the intercept and ǫ is the error term with density f (t) (distributional form of the error term determines the regression model - here generalized gamma distribution because lowest log likelihood and best Akayke and Schwarz)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 16/ 23
  • 65. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Parametric survival models ⇒ accelerated failure time (AFT) models (assumption of hazards’ proportionality is violated in our case) Effect of a predictor is to alter the rate at which the syndication process proceeds along time axis Natural logarithm of the survival time ln(t) is expressed as a linear function of the covariates X : ln(t) = α + X ′ β + ǫ, (3) where α is the intercept and ǫ is the error term with density f (t) (distributional form of the error term determines the regression model - here generalized gamma distribution because lowest log likelihood and best Akayke and Schwarz) Hazard function: h(t) = h0 exp(α + X ′ β)(exp(α + X ′ β)t), (4) where h0 is the baseline hazard rateChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 16/ 23
  • 66. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Dealscan (LPC, Reuters) ⇒ duration, syndicate composition and organization, loan characteristicsChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 17/ 23
  • 67. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Dealscan (LPC, Reuters) ⇒ duration, syndicate composition and organization, loan characteristics Sample size determined by information availability on relevant variablesChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 17/ 23
  • 68. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Dealscan (LPC, Reuters) ⇒ duration, syndicate composition and organization, loan characteristics Sample size determined by information availability on relevant variables Only completed deals (no censoring) + outliers elimination (99-th centile = 234 days)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 17/ 23
  • 69. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Dealscan (LPC, Reuters) ⇒ duration, syndicate composition and organization, loan characteristics Sample size determined by information availability on relevant variables Only completed deals (no censoring) + outliers elimination (99-th centile = 234 days) Final sample = 4,807 syndicated loans from 59 countries between 1992 and 2006Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 17/ 23
  • 70. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion .02 .015 Density .01 .005 0 0 50 100 150 200 250 duration Figure: Frequency distribution of loan syndication process duration.Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 18/ 23
  • 71. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion .02 .015 Density .01 .005 0 0 50 100 150 200 250 duration Figure: Frequency distribution of loan syndication process duration. Mean = 55.14 days (∼ 8 weeks) / standard deviation = 37.02 daysChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 18/ 23
  • 72. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.3 Results: size, concentration, experience and reputation Endogenous variable = duration of loan syndication process Controls not shown / robust standard errors in bracketsChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 19/ 23
  • 73. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.3 Results: size, concentration, experience and reputation Endogenous variable = duration of loan syndication process Controls not shown / robust standard errors in brackets Number of -0.0185∗∗∗ arrangers (0.0022)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 19/ 23
  • 74. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.3 Results: size, concentration, experience and reputation Endogenous variable = duration of loan syndication process Controls not shown / robust standard errors in brackets Number of -0.0185∗∗∗ arrangers (0.0022) Concentration of -0.2899∗∗∗ arrangers (0.0768)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 19/ 23
  • 75. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.3 Results: size, concentration, experience and reputation Endogenous variable = duration of loan syndication process Controls not shown / robust standard errors in brackets Number of -0.0185∗∗∗ arrangers (0.0022) Concentration of -0.2899∗∗∗ arrangers (0.0768) Top 10 arrangers -0.1556∗∗∗ (presence) (0.026)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 19/ 23
  • 76. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.3 Results: size, concentration, experience and reputation Endogenous variable = duration of loan syndication process Controls not shown / robust standard errors in brackets Number of -0.0185∗∗∗ arrangers (0.0022) Concentration of -0.2899∗∗∗ arrangers (0.0768) Top 10 arrangers -0.1556∗∗∗ (presence) (0.026) Top 10 arrangers -0.3731∗∗ (market) (0.1502)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 19/ 23
  • 77. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.3 Results: size, concentration, experience and reputation Endogenous variable = duration of loan syndication process Controls not shown / robust standard errors in brackets Number of -0.0185∗∗∗ arrangers (0.0022) Concentration of -0.2899∗∗∗ arrangers (0.0768) Top 10 arrangers -0.1556∗∗∗ (presence) (0.026) Top 10 arrangers -0.3731∗∗ (market) (0.1502) League table -0.1164∗∗∗ arrangers (0.0269)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 19/ 23
  • 78. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.3 Results: size, concentration, experience and reputation Endogenous variable = duration of loan syndication process Controls not shown / robust standard errors in brackets Number of -0.0185∗∗∗ arrangers (0.0022) Concentration of -0.2899∗∗∗ arrangers (0.0768) Top 10 arrangers -0.1556∗∗∗ (presence) (0.026) Top 10 arrangers -0.3731∗∗ (market) (0.1502) League table -0.1164∗∗∗ arrangers (0.0269) Chi2 2171.887 6713.32 8350.456 4377.684 6959.042Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 19/ 23
  • 79. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.4 Results: composition (nationalities) Endogenous variable = duration of loan syndication process Controls not shown / robust standard errors in bracketsChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 20/ 23
  • 80. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.4 Results: composition (nationalities) Endogenous variable = duration of loan syndication process Controls not shown / robust standard errors in brackets Same country 0.1388∗∗∗ 0.1075∗∗∗ top lenders (0.0275) (0.0274)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 20/ 23
  • 81. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.4 Results: composition (nationalities) Endogenous variable = duration of loan syndication process Controls not shown / robust standard errors in brackets Same country 0.1388∗∗∗ 0.1075∗∗∗ top lenders (0.0275) (0.0274) Same country -0.1055∗∗∗ mid lenders (0.0386)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 20/ 23
  • 82. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.4 Results: composition (nationalities) Endogenous variable = duration of loan syndication process Controls not shown / robust standard errors in brackets Same country 0.1388∗∗∗ 0.1075∗∗∗ top lenders (0.0275) (0.0274) Same country -0.1055∗∗∗ mid lenders (0.0386) Same country -0.0505∗∗ mid-low lenders (0.0242)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 20/ 23
  • 83. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.4 Results: composition (nationalities) Endogenous variable = duration of loan syndication process Controls not shown / robust standard errors in brackets Same country 0.1388∗∗∗ 0.1075∗∗∗ top lenders (0.0275) (0.0274) Same country -0.1055∗∗∗ mid lenders (0.0386) Same country -0.0505∗∗ mid-low lenders (0.0242) Same country 0.0466 top-low lenders (0.0356)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 20/ 23
  • 84. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Tab.4 Results: composition (nationalities) Endogenous variable = duration of loan syndication process Controls not shown / robust standard errors in brackets Same country 0.1388∗∗∗ 0.1075∗∗∗ top lenders (0.0275) (0.0274) Same country -0.1055∗∗∗ mid lenders (0.0386) Same country -0.0505∗∗ mid-low lenders (0.0242) Same country 0.0466 top-low lenders (0.0356) Chi2 7349.766 7970.226 7857.641 8143.089Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 20/ 23
  • 85. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Size, concentration, experience, reputation + compositionChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 21/ 23
  • 86. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Size, concentration, experience, reputation + composition Results remain robust and stableChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 21/ 23
  • 87. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Size, concentration, experience, reputation + composition Results remain robust and stable Number of arrangers + composition variables ⇒ coefficients for composition increase (+ 0.10)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 21/ 23
  • 88. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Size, concentration, experience, reputation + composition Results remain robust and stable Number of arrangers + composition variables ⇒ coefficients for composition increase (+ 0.10) Borrower reputation and opacity effects (reputation: number of interactions with a different arranger / opaque if not listed)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 21/ 23
  • 89. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Size, concentration, experience, reputation + composition Results remain robust and stable Number of arrangers + composition variables ⇒ coefficients for composition increase (+ 0.10) Borrower reputation and opacity effects (reputation: number of interactions with a different arranger / opaque if not listed) Low reputation: coefficient for Concentration of arrangers increases / Top 10 arrangers (market) not significantChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 21/ 23
  • 90. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Size, concentration, experience, reputation + composition Results remain robust and stable Number of arrangers + composition variables ⇒ coefficients for composition increase (+ 0.10) Borrower reputation and opacity effects (reputation: number of interactions with a different arranger / opaque if not listed) Low reputation: coefficient for Concentration of arrangers increases / Top 10 arrangers (market) not significant Opacity: coefficient for Top 10 arrangers (market) increases considerably (+ 0.40)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 21/ 23
  • 91. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Size, concentration, experience, reputation + composition Results remain robust and stable Number of arrangers + composition variables ⇒ coefficients for composition increase (+ 0.10) Borrower reputation and opacity effects (reputation: number of interactions with a different arranger / opaque if not listed) Low reputation: coefficient for Concentration of arrangers increases / Top 10 arrangers (market) not significant Opacity: coefficient for Top 10 arrangers (market) increases considerably (+ 0.40) Emerging markets’ borrower effects (specific composition and organization: more arrangers / less top lenders)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 21/ 23
  • 92. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Size, concentration, experience, reputation + composition Results remain robust and stable Number of arrangers + composition variables ⇒ coefficients for composition increase (+ 0.10) Borrower reputation and opacity effects (reputation: number of interactions with a different arranger / opaque if not listed) Low reputation: coefficient for Concentration of arrangers increases / Top 10 arrangers (market) not significant Opacity: coefficient for Top 10 arrangers (market) increases considerably (+ 0.40) Emerging markets’ borrower effects (specific composition and organization: more arrangers / less top lenders) Coefficient for League table arrangers increases (+ 0.20) / coefficient for Same country top lenders not significantChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 21/ 23
  • 93. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Robustness checksChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 22/ 23
  • 94. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Robustness checks Dropping durations above 100 and 200 days respectivelyChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 22/ 23
  • 95. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Robustness checks Dropping durations above 100 and 200 days respectively Restrictive definitions of top lendersChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 22/ 23
  • 96. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Robustness checks Dropping durations above 100 and 200 days respectively Restrictive definitions of top lenders Different distributions for error term (Weibull, log-logistic, log-normal)Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 22/ 23
  • 97. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Robustness checks Dropping durations above 100 and 200 days respectively Restrictive definitions of top lenders Different distributions for error term (Weibull, log-logistic, log-normal) Two step procedure [1. syndicate organization = f(loan characteristics) ⇒ 2. duration = f(fitted value of syndicate organization from 1.)]Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 22/ 23
  • 98. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Informational problems ⇒ agency problems ⇔ duration of a loan syndication processChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 23/ 23
  • 99. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Informational problems ⇒ agency problems ⇔ duration of a loan syndication process Syndicate composition and organization can mitigate these problems ⇒ impact on durationChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 23/ 23
  • 100. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Informational problems ⇒ agency problems ⇔ duration of a loan syndication process Syndicate composition and organization can mitigate these problems ⇒ impact on duration Duration = critical element / main advantage of syndicated lendingChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 23/ 23
  • 101. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Informational problems ⇒ agency problems ⇔ duration of a loan syndication process Syndicate composition and organization can mitigate these problems ⇒ impact on duration Duration = critical element / main advantage of syndicated lending Main resultsChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 23/ 23
  • 102. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Informational problems ⇒ agency problems ⇔ duration of a loan syndication process Syndicate composition and organization can mitigate these problems ⇒ impact on duration Duration = critical element / main advantage of syndicated lending Main results Syndicate composition and organization clearly matter for the durationChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 23/ 23
  • 103. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Informational problems ⇒ agency problems ⇔ duration of a loan syndication process Syndicate composition and organization can mitigate these problems ⇒ impact on duration Duration = critical element / main advantage of syndicated lending Main results Syndicate composition and organization clearly matter for the duration How to get a syndicated loan fast ?Christophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 23/ 23
  • 104. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Informational problems ⇒ agency problems ⇔ duration of a loan syndication process Syndicate composition and organization can mitigate these problems ⇒ impact on duration Duration = critical element / main advantage of syndicated lending Main results Syndicate composition and organization clearly matter for the duration How to get a syndicated loan fast ? Numerous, experienced and reputable arrangers with high concentration of retained shares of the loanChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 23/ 23
  • 105. Introduction Loan syndication process Empirical design Methodology Data Results Conclusion Informational problems ⇒ agency problems ⇔ duration of a loan syndication process Syndicate composition and organization can mitigate these problems ⇒ impact on duration Duration = critical element / main advantage of syndicated lending Main results Syndicate composition and organization clearly matter for the duration How to get a syndicated loan fast ? Numerous, experienced and reputable arrangers with high concentration of retained shares of the loan Syndicate managers geographical and cultural closeness with borrower / within syndicateChristophe J. Godlewski University of StrasbourgHow to get a syndicated loan fast ? The role of syndicate composition and organization 23/ 23

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