Did Securitization Affect the Cost of Corporate Debt?

Taylor D. Nadauld and Michael Weisbach
Additional contact information
Taylor D. Nadauld: Brigham Young University

Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics

Abstract: This paper investigates whether the securitization of corporate bank loans had an impact on the price of corporate debt. Our results suggest that loans that are subsequently securitized are associated with a lower spread of 10-17 basis points relative to loans that are not subsequently securitized. To identify the particular role of securitization, we employ a difference in differences approach and consider loan characteristics that are associated with securitization such as the payoff structure and the identity of the originating bank. Spreads on "securitization-friendly" Term Loan B facilities relative to either Term Loan A facilities or revolvers decline with the 2004-2007 Securitization Boom. This decline is driven almost completely by loans originated by banks active in CLO origination. The results are consistent with the view that securitization caused a reduction in the cost of capital.

Date: 2010-09
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.cob.ohio-state.edu/fin/dice/papers/2010/2010-16.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.cob.ohio-state.edu/fin/dice/papers/2010/2010-16.pdf [301 Moved Permanently]--> https://www.cob.ohio-state.edu/fin/dice/papers/2010/2010-16.pdf [301 Moved Permanently]--> https://fisher.osu.edu/fin/dice/papers/2010/2010-16.pdf)

Related works:
Journal Article: Did securitization affect the cost of corporate debt? (2012)
Working Paper: Did Securitization Affect the Cost of Corporate Debt? (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:ohidic:2010-16

Access Statistics for this paper

More papers in Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().