Firm transparency & the impact of economic crises on Western European syndicated loan pricing

Abstract

This research investigates the relationship between the transparency level of a firm and the effects of economic crises on the all-in-drawn spread of syndicated loans. To conduct my research, I gathered a sample of 3,116 syndicated loans, granted to 932 individual companies in the Benelux, Germany and France granted from 01/2008 until 06/2022. This timeframe covers 3 major economic crises: the 2008/2009 financial crisis, the European debt crisis, and the COVID-19 crisis. My findings confirm that public and especially large-cap firms experience a stronger increase in syndicated loan prices during economic crises. Furthermore, I also provide a deeper understanding of the dynamics at play by including borrower-specific variables, such as the EBITDA and the effect of a borrowers’ credit rating. To validate my results, I have also performed a series of robustness checks.

Date of Award	4 Jul 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Ricardo Reis (Supervisor)