Syndicated Loan Market Germany: Deep Dive into Role Allocation
Syndicated Loan Market Germany: Deep Dive into Role Allocation

Author(s): Ilja Schaab, Eric Frère, Alexander Zureck
Subject(s): Transformation Period (1990 - 2010), Present Times (2010 - today), Financial Markets
Published by: Masarykova univerzita nakladatelství
Keywords: Syndicated Loan Market; Mandated Lead Arranger; Bookrunner; Determinants Role Allocation;
Summary/Abstract: The selection and mandate of capable partners in a syndicate loan transaction is essential to a successful realization. However, financial managers have not only to decide which banks but also how many banks should be involved in the transaction at hand to generate an optimal cost-benefit-ratio. While other studies have investigated the impact of arranger reputation on the syndicate structure, this paper focuses on the identification of significant transaction-related determinants of mandate allocation on the syndicated loan market in Germany. The analysis of the 2,161 data sets from transactions between 2001 and 2017 is conducted by the ordinary least squares method. The findings show that the transaction volumes have a significant positive impact on the number of mandated banks, whereas the complexity of the transaction, represented by the number and type of facilities as well as the total allocation of arranger titles, has a significantly negative impact on the mandate allocation. Furthermore, the study reveals a structural break in the strategy of role allocation in the market which occurs in the year 2009 during the financial crisis. Ever since, the allocation of MLA and Bookrunner titles increased significantly.

• Details
• Contents