Job Talk

Accounting Seminar（2017-01）

Topic: Private Relationship Lending in Syndicated Loans: a Participant's Perspective

Speaker: Xinlei Li, Columbia University

Time: Tuesday, Feb.21, 10:00-11:30 a.m

Place: Room217, Guanghua Building 2

Abstract:

I explore the role of participants’ relationships with borrowers and lead arrangers in syndicated lending. I predict and find that these relationships mitigate the information asymmetry problems faced by participants with both borrowers and lead arrangers and allow participants to take a larger share in the loan. In particular, participants with a borrower relationship take, on average, a 10% larger share of the loan, with the effect being more pronounced when the borrower is informationally opaque. Similarly, participants with a lead arranger relationship take, on average, a 9% larger share of the loan, with the effect being more pronounced when the lead arranger is a repeat lender or a large lender, and when participants have limited information acquisition capacity. Furthermore, loans with a larger total share taken by participants with a borrower or lead arranger relationship are associated with a smaller lead arranger share, less concentrated loan syndicate structure and lower cost of debt, consistent with these relationships mitigating information asymmetry. Overall, my study sheds light on how participant-level relationship lending shapes debt contracting.

Introduction:

Xinlei Li is a PhD student of Accounting in Columbia Business School at Columbia University. She expects to graduate in May 2017, with the job market paper titled “Relationship Lending in Syndicated Loans: a Participant’s Perspective”.

Xinlei Li's research focuses on the role of accounting information in debt contracting, corporate governance, and disclosure. Her working paper “Co-Migration and the Benefits of Relationships in Bank Lending” is under revision for the second round at the Accounting Review.

Your participation is warmly welcomed!