Large debt financing: syndicated loans versus corporate bonds

By Yener Altunbaş, A. Kara, David Marqués-Ibáñez. Social Science Research Network, 2010

115 citations recorded by the source corpus.

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 choose syndicated loans. In contrast, firms with more short-term debt and those perceived by markets as having more growth opportunities favour financing through corporate bonds. Syndicated loans are the preferred instrument at the extreme where firms are very large, profitable but have less growth opportunities.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/cc88898f084232655e90d667bc8fc7a737ebe825

Citations in the corpus

• How National and International Financial Development Affect Industrial R&D (2011, unknown): “In contrast, Altunbaş et al. (2009) argue that bond markets may be particularly useful for financing activities that embody forward-looking expectations.”