The pricing of sustainable syndicated loans

Paulo Alves; Jorge Gonçalo; João Pinto

The pricing of sustainable syndicated loans

Paulo Alves
, Jorge Gonçalo
, João Pinto

Resultado de pesquisa › revisão de pares

25 Transferências (Pure)

Resumo

This paper provides a comparative analysis of sustainable and conventional syndicated loan spreads and pricing. Using a cross-section of 24,962 syndicated loan tranches closed between 2018 and 2022 in OECD countries, we show that sustainable and conventional loans are differently priced, spreads of sustainable versus conventional loans do not differ significantly, and banks rely on contractual, macroeconomic, bank syndicate structure, and borrowers’ characteristics when pricing sustainable tranches. At the deal-level, our results do not support the hypothesis of sustainable debt financing as a mechanism for reducing firms’ funding costs. We also find that economies of scale, institutional, and information asymmetry arguments affect firms’ choice between sustainable and conventional syndicated deals.

Idioma original	English
Número de páginas	50
Estado da publicação	Publicado - 4 fev. 2024
Evento	European Financial Management Association 2024 Annual Meeting - Universidade de Lisboa, Lisboa Duração: 26 jun. 2024 → 29 jun. 2024

Conferência

Conferência	European Financial Management Association 2024 Annual Meeting
Título abreviado	EFMA
País/Território	Portugal
Cidade	Lisboa
Período	26/06/24 → 29/06/24

Acesso ao documento

119687876Final published version, 835 KBLicença: Unspecified

http://hdl.handle.net/10400.14/53447Licença: Unspecified

The pricing of sustainable syndicated loans
Alves, P. (Speaker), Gonçalo, J. (Speaker) & Pinto, J. (Speaker)
4 fev. 2024
Atividade

CEGE: Research Center in Management and Economics
Silva, M. (Professor Catedrático), Sousa, R. (Professor Catedrático), Alves, P. (Professor Auxiliar), Madsen, A. (Professor Auxiliar Convidado), Lourenço, A. (Professor Associado), Carvalho, A. S. (Professor Associado), Andrade, A. (Professor Auxiliar), Silva, P. D. (Professor Associado), Vlačić, B. (Professor Auxiliar Convidado), Martins, C. (Professor Auxiliar Convidado), Gomes, C. (Investigador Auxiliar), Gevrek, Z. E. (Professor Auxiliar Convidado), Oliveira, F. G. D. (Professor Associado), Faria, G. (Professor Associado Convidado), Marreiros, H. (Bolseiro), Pinho, J. (Professor Auxiliar Convidado), Machado, J. (Professor Associado), Araújo, J. (Investigador Auxiliar), Pinto, J. (Professor Auxiliar), Rego, A. (Professor Catedrático), Gaspar, J. M. (Investigador Auxiliar), Corbo, L. (Professor Auxiliar Convidado), Costa, L. (Professor Associado), Fernandes, L. (Professor Auxiliar), Sottomayor, M. (Professor Auxiliar), Martins, N. (Professor Catedrático), Hernández-Marrero, P. (Investigador Auxiliar), Gonçalves, R. (Professor Associado), Ribeiro, R. (PI), Coelho, S. L. (Docente Assistente), Pereira, S. M. (Investigador Auxiliar), Silva, S. (Professor Associado), Rodrigues, V. (Professor Associado), Sotiros, D. G. (Investigador Auxiliar), Valverde, C. (Professor Auxiliar), Leitão, A. (Professor Auxiliar), Julião, J. (Professor Auxiliar), Tavares, M. (Professor Auxiliar), Lages, C. R. (Investigador Auxiliar), Elmashhara, M. G. (Investigador Auxiliar) & Teymourifar, A. (Investigador Auxiliar)
1/01/20 → 31/12/25
Projeto

Citação

@conference{63e4ea9e24484125b87e2c0659f122da,

title = "The pricing of sustainable syndicated loans",

abstract = "This paper provides a comparative analysis of sustainable and conventional syndicated loan spreads and pricing. Using a cross-section of 24,962 syndicated loan tranches closed between 2018 and 2022 in OECD countries, we show that sustainable and conventional loans are differently priced, spreads of sustainable versus conventional loans do not differ significantly, and banks rely on contractual, macroeconomic, bank syndicate structure, and borrowers{\textquoteright} characteristics when pricing sustainable tranches. At the deal-level, our results do not support the hypothesis of sustainable debt financing as a mechanism for reducing firms{\textquoteright} funding costs. We also find that economies of scale, institutional, and information asymmetry arguments affect firms{\textquoteright} choice between sustainable and conventional syndicated deals.",

keywords = "ESG, Syndicated loans, Credit spreads, Loan pricing, Cost of borrowing",

author = "Paulo Alves and Jorge Gon{\c c}alo and Jo{\~a}o Pinto",

year = "2024",

month = feb,

day = "4",

language = "English",

note = "European Financial Management Association 2024 Annual Meeting, EFMA ; Conference date: 26-06-2024 Through 29-06-2024",

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TY - CONF

T1 - The pricing of sustainable syndicated loans

AU - Alves, Paulo

AU - Gonçalo, Jorge

AU - Pinto, João

PY - 2024/2/4

Y1 - 2024/2/4

N2 - This paper provides a comparative analysis of sustainable and conventional syndicated loan spreads and pricing. Using a cross-section of 24,962 syndicated loan tranches closed between 2018 and 2022 in OECD countries, we show that sustainable and conventional loans are differently priced, spreads of sustainable versus conventional loans do not differ significantly, and banks rely on contractual, macroeconomic, bank syndicate structure, and borrowers’ characteristics when pricing sustainable tranches. At the deal-level, our results do not support the hypothesis of sustainable debt financing as a mechanism for reducing firms’ funding costs. We also find that economies of scale, institutional, and information asymmetry arguments affect firms’ choice between sustainable and conventional syndicated deals.

AB - This paper provides a comparative analysis of sustainable and conventional syndicated loan spreads and pricing. Using a cross-section of 24,962 syndicated loan tranches closed between 2018 and 2022 in OECD countries, we show that sustainable and conventional loans are differently priced, spreads of sustainable versus conventional loans do not differ significantly, and banks rely on contractual, macroeconomic, bank syndicate structure, and borrowers’ characteristics when pricing sustainable tranches. At the deal-level, our results do not support the hypothesis of sustainable debt financing as a mechanism for reducing firms’ funding costs. We also find that economies of scale, institutional, and information asymmetry arguments affect firms’ choice between sustainable and conventional syndicated deals.

KW - ESG

KW - Syndicated loans

KW - Credit spreads

KW - Loan pricing

KW - Cost of borrowing

M3 - Paper

T2 - European Financial Management Association 2024 Annual Meeting

Y2 - 26 June 2024 through 29 June 2024

ER -

The pricing of sustainable syndicated loans

Resumo

Conferência

Acesso ao documento

Impressão digital

Atividades

The pricing of sustainable syndicated loans

Projetos

CEGE: Research Center in Management and Economics

Citação