Financial support from IFM2 and FQRSC is gratefully acknowledged. Part of this research was completed while François was visiting IGR at Université de Rennes and Missonier-Piera was at HEC Lausanne. We are grateful to two anonymous referees and the editor (Arnold R. Cowan) for their helpful comments. We have also benefited from discussions with Benoît Dostie, Georges Hübner, Denis Larocque, Thomas Moeller, Nicolas Papageorgiou, Sophie Pardo, and participants of the 2004 NFA Conference and the 2005 FMA Conference. We thank Sarah Bounab, Yann Bieli, and Marie-Chantal Ouellette for excellent research assistance. Any remaining errors are our own.
The Agency Structure of Loan Syndicates
Version of Record online: 5 JUN 2007
Volume 42, Issue 2, pages 227–245, May 2007
How to Cite
François, P. and Missonier-Piera, F. (2007), The Agency Structure of Loan Syndicates. Financial Review, 42: 227–245. doi: 10.1111/j.1540-6288.2007.00169.x
- Issue online: 5 JUN 2007
- Version of Record online: 5 JUN 2007
- loan syndication;
- bank specialization;
Leaders of loan syndicates often delegate some administrative tasks to banks known as co-agents. One reason is that co-agents are specialized banks that help split the costs of managing the syndicate. Another reason is that co-agents monitor the leader on behalf of syndicate members to mitigate informational asymmetry problems. Large sample tests on the Dealscan database provide support for both arguments. Evidence of repeated contracting between the same banks explains the moderate magnitude of monitoring effects.