Analyst coverage, syndicate structure, and loan contracts

LiuLing Liu ()

Eurasian Economic Review, 2015, vol. 5, issue 1, 21 pages

Abstract: This paper examines the effect of information intermediaries, specifically financial analysts, on the non-price terms and syndicate structure of bank loans. We find that loans to firms with higher analyst coverage have significantly less intensive covenant restrictions, a lower likelihood of requiring collateral and a lower likelihood of having performance-pricing provisions. Furthermore, our results document a negative relation between analyst coverage and loan maturity, implying that banks become more information-sensitive when lending to firms with large analyst coverage. We also find evidence that lenders tend to form less concentrated syndicate when the number of analysts increases. Copyright Eurasia Business and Economics Society 2015

Keywords: Financial analysts; Bank loan contacts; Non-pricing term; Syndicate structure; G14; G21; G32 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1007/s40822-015-0015-8

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