Abstract
Using a large panel dataset of syndicated corporate loan facilities, we empirically identify the factors that influence the likelihood of securitization and the determinants of syndicate structure. The evidence reveals that facilities with higher credit risk and less information asymmetry are more likely to be securitized, while the percentage of a facility being securitized decreases with credit risk. We also find that securitization is associated with smaller lead arranger and total bank shares, but larger shares held by non-CLO institutional investors. Such a relationship exists in Term A, Term B, and leveraged facilities, suggesting that the relationship between securitization and syndicate structure is not entirely driven by the practice of bank and institutional participants targeting different segments of the syndicated loan market. Further analysis shows that the negative relationship between securitization and lead arranger share is stronger in the presence of greater information asymmetry.
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