Using a new dataset on syndicated loan primary market pricing adjustments, we examine whether relationship banks' information advantage facilitates price discovery in loan issuances. We find that the lead bank makes fewer adjustments to the initial pricing terms of a syndicated loan and shortens...

We analyse whether soliciting multiple ratings leads to lower syndicated loan spreads. Our results document that banks apply, on average, lower spreads to multi-rated firms. This effect depends on the reduction of information asymmetry about borrowers' creditworthiness (information production...

We analyze whether the disaggregation quality (DQ) of a borrower's financial statement is associated with its bank loan pricing. We find that firms with low DQ have high bank loan spreads and total cost of borrowing. These results are more pronounced for risky and poorly governed firms....

We examine the effect of open market share repurchase announcements on prices of traded loans and find a significant wealth transfer effect; the change in the market value of equity is inversely related to the change in the market value of loans. We find that loan abnormal returns are more...

We test whether bank loans change public bond yields. A 10% increase in bank debt raises bond yields by 15bps, reflecting a trade-off between the benefits of bank cross-monitoring and higher bond risk. This effect is smaller for firms with no CDS and junk debt, where bank monitoring is most...

I study ways the shift in credit price disclosures from dollar terms to interest rates has impacted consumer and firm behavior. In an experiment, I find that consumers cannot, rather than do not, translate interest rates into cost obligations, causing both underconsumption and overconsumption of...

We study credit ratings on subprime and Alt-A mortgage-backed-securities (MBS) deals issued between 2001 and 2007, the period leading up to the subprime crisis. The fraction of highly rated securities in each deal is decreasing in mortgage credit risk (measured either ex ante or ex post),...

We provide large sample evidence that credible hedge commitments reduce the agency costs of debt and that accounting conservatism enhances hedge commitments. We examine 2,338 bank loans entered into by 263 mandatory derivative users that are contractually obligated by interest rate protection...

Using information from bonds issued over the past twenty years, this study finds that the largest banks have a cost advantage vis-à-vis their smaller peers. This cost advantage may not be entirely due to investors' belief that the largest banks are “too big to fail” because the study also...

Since 2010 approximately 40 developing countries and transitional economies imposed interest rate caps. This article analyses the impact of these interest rate caps on microfinance institutions. Introducing the taxonomy of soft, mezzo and hard interest rate caps we take a stance against hard...