Structure and pricing of large bank loans

James R. Booth and Lena Chua

Economic Review, 1995, 52-62

Abstract: This paper examines the characteristics of large bank loans as a form of corporate finance. We compare the characteristics of a sample of these loans with private placements and public issues of debt. The unique features of large bank loans that may encourage firms to continue using this source of financing include: borrower flexibility in deciding on the timing and amount of borrowing; the use of fixed-spread floating rate of interest, flexibility of changing and renegotiating contract features, such as covenants, during the life of the contract.

Keywords: Bank loans; Interest rates (search for similar items in EconPapers)
Date: 1995
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Citations: View citations in EconPapers (6)

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