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Large debt financing: syndicated loans versus corporate bonds

Altunbaş, Yener, Kara, Alper and Marques-Ibanez, David (2010) Large debt financing: syndicated loans versus corporate bonds. The European Journal of Finance, 16 (5). pp. 437-458. ISSN 1351-847X

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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 choose syndicated loans. In contrast, firms with more short-term debt and those perceived by markets as having more growth opportunities favour financing through corporate bonds. Syndicated loans are the preferred instrument at the extreme where firms are very large, profitable but have less growth opportunities.

Item Type: Article
Uncontrolled Keywords: Syndicated loans; Corporate bonds; Debt choice; The Euro area
Subjects: H Social Sciences > HG Finance
Schools: Huddersfield Business School
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Depositing User: Alper Kara
Date Deposited: 28 Nov 2017 14:58
Last Modified: 28 Aug 2021 12:23


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