Factors Affecting Syndicated Loan Spreads in Indonesia, Thailand, and Vietnam

Jonathan Bryan, Deddy Marciano (), Endang Ernawati and James Bartle
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Jonathan Bryan: University of Surabaya
Deddy Marciano: University of Surabaya
Endang Ernawati: University of Surabaya
James Bartle: University of New South Wales

A chapter in Proceedings of the 19th International Symposium on Management (INSYMA 2022), 2023, pp 108-117 from Springer

Abstract: Abstract This study aims to analyze the effect of loan information (i.e., number of lenders, loan amount, and loan maturity) and borrower characteristics (i.e., public, firm size, leverage, and profitability), as well as control variables such as country and year on syndicated loan, spread in public companies and private companies in Indonesia, Thailand, and Vietnam during the 2008–2018 period by calculating the All In Spread Drawn (AISD) of the syndicated loans over LIBOR. This study applied a quantitative approach through the ordinary least squares method on a sample of 389 observations. A total of 118 observations came from public companies, and 271 observations came from private companies. This study shows that syndicated loans given to private companies are more expensive than public companies. However, this can be minimized by increasing the loan exposure for private firms through a larger number of lenders. It can also be seen that public companies with larger assets, higher returns on equity, and borrowing with shorter terms will be subject to lower interest rates. The spreads for syndicated loans are the most expensive in Indonesia, followed by Vietnam and Thailand.

Keywords: syndicated loan spreads; loan information; borrower characteristic (search for similar items in EconPapers)
Date: 2023
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DOI: 10.2991/978-94-6463-008-4_15

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