Duration of syndication process and syndicate organization

Christophe Godlewski

Working Papers of LaRGE Research Center from Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg

Abstract: What is the influence of syndicate organization on the duration of a loan syndication process? We answer this question using the survival analysis methodology on a sample of loans to borrowers from 59 countries. We find that syndicate size, concentration, experience, reputation, and national diversity clearly matters for the duration of a syndication process and therefore for borrower satisfaction regarding the speed of obtaining the necessary funding. A syndicate organization adapted to specific agency problems of syndication, with numerous, reputable, and experienced arrangers retaining a larger portion of the loan reduces the duration. The latter is also shorter when more lenders come from the same country as the borrower. These effects are more pronounced when the borrower has a low reputation on the syndicated lending market and when his opacity is stronger.

Keywords: Syndicated loan; syndication process; syndicate organiza- tion; agency costs; experience; reputation; nationality; survival analysis. (search for similar items in EconPapers)
JEL-codes: C41 F30 G15 G21 G32 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-ban and nep-cfn
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Persistent link: https://EconPapers.repec.org/RePEc:lar:wpaper:2008-20

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