Is the Corporate Loan Market Globally Integrated? A Pricing Puzzle

Loading...
Thumbnail Image
Penn collection
Finance Papers
Degree type
Discipline
Subject
Finance
Finance and Financial Management
Funder
Grant number
License
Copyright date
Distributor
Related resources
Author
Carey, Mark
Nini, Gregory Paul
Contributor
Abstract

We offer evidence that interest rate spreads on syndicated loans to corporate borrowers are economically significantly smaller in Europe than in the United States, other things equal. Differences in borrower, loan, and lender characteristics do not appear to explain this phenomenon. Borrowers overwhelmingly issue in their natural home market and bank portfolios display home bias. This may explain why pricing discrepancies are not competed away, though their causes remain a puzzle. Thus, important determinants of loan origination market outcomes remain to be identified, home bias appears to be material for pricing, and corporate financing costs differ across Europe and the United States.

Advisor
Date Range for Data Collection (Start Date)
Date Range for Data Collection (End Date)
Digital Object Identifier
Series name and number
Publication date
2007-01-01
Journal title
The Journal of Finance
Volume number
Issue number
Publisher
Publisher DOI
Journal Issue
Comments
At the time of publication, author Gregory Paul Nini was affiliated with the Federal Reserve Board. Currently, he is a faculty member at the Wharton School at the University of Pennsylvania.
Recommended citation
Collection