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- Title
Relationship Banking and Loan Syndicate Structure: The Role of Private Equity Sponsors.
- Authors
Huang, Rongbing; Zhang, Donghang; Zhao, Yijia (Eddie)
- Abstract
Abstract: Using a sample of syndicated loans to private equity (PE)‐backed initial public offering companies, we examine how a third‐party bank relationship influences the syndicate structure of a loan. We find that a stronger relationship between the lead bank and the borrower's PE firm enables the lead bank to retain a smaller share of the loan and form a larger and less concentrated syndicate, especially when the borrower is less transparent. A stronger PE‐bank relationship also attracts greater foreign bank participation. Our findings suggest that the lead bank's relationship with a large equity holder of the borrower facilitates information production in lending.
- Subjects
SYNDICATED loans; INVESTMENT banking; PRIVATE equity; GOING public (Securities); BANKING industry
- Publication
Financial Review, 2018, Vol 53, Issue 3, p461
- ISSN
0732-8516
- Publication type
Article
- DOI
10.1111/fire.12146