Academic SeminarDoes Lenders’ Perception of Trustworthiness in Borrowers Affect the Pricing and Design of International Syndicated Loans?
- 2019-12-13 ~ 2019-12-13
회계 분야 세미나를 아래와 같이 개최하오니, 관심 있는 분들의
많은 참석 부탁 드립니다.
1. 일시: 2019년 12월 13일 (금), 16:00~17:30
2. 장소: 9호관 7층, 9708호 강의실
3. 강사: 정병헌 교수 (Nanyang Technological University)
4. 주제: Does Lenders’ Perception of Trustworthiness in Borrowers Affect the Pricing and Design of International Syndicated Loans?
5. 연구분야: 회계
* Lecture will be delivered in English.
This paper studies whether lender’s trust in a borrower affects the pricing and design of loans in international syndicated loan markets and also the borrower’s reporting attribute. We find that when a lead bank of a syndicated loan trusts the borrower more, the bank charges lower interest and includes less restrictive covenants. We also show that lower lender’s trust in a borrower is associated with greater conditional conservatism in the borrower’s financial reports. Our additional tests support the following conjectures. First, during the Financial Crisis of 2008, lead banks retrench less from more trusted borrowers. Second, when participant banks in a syndicated loan trust their lead bank more, they share greater proportion of the loan with the lead bank. This evidence further supports our argument that trust facilitates risk taking by sophisticated economic agents in the presence of information asymmetry. Overall, our evidence suggests that the lead bank’s trust not only affects how international syndicated loans are priced and designed, but also matters for borrowers’ financial reporting attribute.