Banking relationship and syndicated loans during the last financial crisis

Karima Bouaiss (), Hervé Alexandre () and Catherine Refait-Alexandre

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Abstract: Banking relationship has been showed to be important in lending, especially in small business lending. Few studies focus on banking relationship in syndicated loan, although they have became a major way of financing. The last financial crisis has clearly shown credit rationing, and credit conditions tightening, even in syndicated loans market. We investigate whether banking relationship helps firms to benefit from better syndicated loans terms in a chaotic financial environment. Using a sample of syndicated loans issued in 2008 in North America and Europe, and records of syndicated loans since 2003, we find that firms that had developed a previous relationship with an investment bank obtained a lower spread and for longer maturity during the financial crisis but did not benefit from greater loan facilities.

Keywords: Syndicated loans; banking relationship (search for similar items in EconPapers)
Date: 2011-06
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Published in 28th GdRE Annual International Symposium on Money, Banking and Finance, Jun 2011, Reading, Royaume-Uni. pp.21

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01637916

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