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Large debt financing: syndicated loans versus corporate bonds

Yener Altunbas (), Alper Kara () and David Marques-Ibanez ()

No 1028, Working Paper Series from European Central Bank

Abstract: Following the introduction of the euro, the markets for large debt financing experienced a historical expansion. We investigate the financial factors behind the issuance of syndicated loans for an extensive sample of euro area non-financial corporations. For the first time we compare these factors to those of its major competitor: the corporate bond market. We find that large firms, with greater financial leverage, more (verifiable) profits and higher liquidation values tend to prefer syndicated loans. In contrast, firms with larger levels of short-term debt and those perceived by markets as having more growth opportunities favour financing through corporate bonds. JEL Classification: D40, F30, G21

Keywords: corporate bonds; debt choice; syndicated loans; the euro (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec
Date: 2009-03
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20091028

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