The Syndicated Loan Market

Overview: "The syndicated loan market, a hybrid of the commercial banking and investment banking worlds, is globally one of the largest and most flexible sources of capital. Syndicated loans have become an important corporate financing technique, particularly for large firms and increasingly for midsized firms.Here the author describes the rapid development of the syndicated corporate loan market in the 1990s. He explores the historical forces that led to the development of the contemporary U.S. syndicated loan market, which is effectively a hybrid of the investment banking and commercial banking worlds. He suggests that there has been a notable change in large corporate lending over the past decade, as the old bilateral bank-client lending relationships have been replaced by a world that is much more transaction-oriented and market-oriented. The Canadian syndicated loan market has been strongly influenced by its U.S. counterpart, but it is not yet at the same level of development. It also explores potential risk issues for the new corporate loan market, including implications for the distribution of credit risk in the system, risks in the underwriting process, the monitoring function, and the potential for risk arising from asymmetric information."

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Format: PDF | Size: 416KB | Date: Jun 2003 | Pages: 43