Do Lead Arrangers Retain Their Lead Shares?

Kristian Blickle, Quirin Fleckenstein, Sebastian Hillenbrand and Anthony Saunders

No 922, Staff Reports from Federal Reserve Bank of New York

Abstract: We examine how lead arrangers’ ownership stakes in syndicated loans evolve after origination, complementing prior research on lead shares at origination. Lead arrangers tend to retain shares in bankheld loans but frequently sell shares in loans distributed to institutional investors, typically within days of origination. The frequency of these loan sales has increased over time, aligning with the rise of the originate-to-distribute model. Importantly, we find no evidence that loan sales are associated with worse performance. Additional evidence suggests that exposure through other loans, temporary retention during syndication, and reputation concerns help mitigate information asymmetries in the syndicated loan market.

Keywords: syndicated lending; loan sales; lead arranger (search for similar items in EconPapers)
JEL-codes: G21 G24 G30 (search for similar items in EconPapers)
Pages: 99
Date: 2020-05-01
New Economics Papers: this item is included in nep-ban
Note: Revised January 2026. Previous title: “The Myth of the Lead Arranger’s Share.”
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Citations: View citations in EconPapers (14)

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