Large debt financing: Syndicated loans versus corporate bonds

Yener Altunbaş, Alper Kara, David Marques-Ibanez

Research output: Working paper

Abstract

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 prefer syndicated loans. In contrast, firms with larger levels of short-term debt and those perceived by markets as having more growth opportunities favour financing through corporate bonds.
LanguageEnglish
PublisherEuropean Central Bank
Number of pages37
Publication statusPublished - Mar 2009
Externally publishedYes

Publication series

NameECB Working Paper Series
PublisherEuropean Central Bank
No.1028
ISSN (Electronic)1725-2806

Fingerprint

Debt financing
Corporate bonds
Factors
Syndicated loans
Short-term debt
Euro area
Liquidation
Profit
Financing
Financial leverage
Bond market
Large firms
Competitors
Growth opportunities

Cite this

Altunbaş, Y., Kara, A., & Marques-Ibanez, D. (2009). Large debt financing: Syndicated loans versus corporate bonds. (ECB Working Paper Series; No. 1028). European Central Bank.
Altunbaş, Yener ; Kara, Alper ; Marques-Ibanez, David. / Large debt financing : Syndicated loans versus corporate bonds. European Central Bank, 2009. (ECB Working Paper Series; 1028).
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Altunbaş, Y, Kara, A & Marques-Ibanez, D 2009 'Large debt financing: Syndicated loans versus corporate bonds' ECB Working Paper Series, no. 1028, European Central Bank.

Large debt financing : Syndicated loans versus corporate bonds. / Altunbaş, Yener; Kara, Alper; Marques-Ibanez, David.

European Central Bank, 2009. (ECB Working Paper Series; No. 1028).

Research output: Working paper

TY - UNPB

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T2 - Syndicated loans versus corporate bonds

AU - Altunbaş, Yener

AU - Kara, Alper

AU - Marques-Ibanez, David

PY - 2009/3

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N2 - 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 prefer syndicated loans. In contrast, firms with larger levels of short-term debt and those perceived by markets as having more growth opportunities favour financing through corporate bonds.

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KW - syndicated loans

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PB - European Central Bank

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Altunbaş Y, Kara A, Marques-Ibanez D. Large debt financing: Syndicated loans versus corporate bonds. European Central Bank. 2009 Mar. (ECB Working Paper Series; 1028).