Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129109
Authors: 
Berg, Tobias
Saunders, Anthony
Steffen, Sascha
Streitz, Daniel
Year of Publication: 
2016
Series/Report no.: 
ZEW Discussion Papers 16-018
Abstract: 
We analyze differences in the pricing of syndicated loans between U.S. and European loans. For credit lines, U.S. borrowers pay significantly higher spreads, but also lower fees, resulting in similar total costs of borrowing in both markets. For term loans, U.S. firms pay significantly higher spreads. While European firms across the rating spectrum issue terms loans, only low quality U.S. firms rely on term loans. U.S. issuers perform worse after loan origination compared to European issuers, which explains 30% of the spread differential. Increasing loan supply by institutional lenders in the U.S. since 2003 eventually fully removed the term loan pricing gap.
Subjects: 
loans
corporate debt
fees
market integration
globalization
JEL: 
G30
G20
G15
Document Type: 
Working Paper

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