Does A Banking Relationship Help A Firm On The Syndicated Loans Market In A Time Of Financial Crisis?

The volume of credit granted in the form of syndicated loans saw a marked downturn in 2008. This paper seeks to understand how certain firms were nonetheless able to benefit from larger facilities or a lower interest rate than others. Using a sample of syndicated loans issued in 2008 in North America and Europe, and records of syndicated loans since 2003, the authors show that firms that had developed a relationship with an investment bank obtained a lower spread, but did not benefit from greater loan facilities or longer maturities.