Does a Banking Relationship Help a Firm on the Syndicated Loans Market in a Time of Financial Crisis?

Abstract

The volume of credit granted in the form of syndicated loans saw a marked downturn in 2008.This article seeks to understand how certain firms were nonetheless able to benefit from larger facilities or a lower interest rate than others. Using a sample of syndicated loans issued in 2008 in North America and Europe, and records of syndicated loans since 2003, we show that firms that had developed a relationship with an investment bank obtained a lower spread, but did not benefit from greater loan facilities or longer maturities.JEL classification: G10, G21, G32