Financial Covenants and Outside Rating as Factors Restricting Information Asymmetry on the Syndicated Loan Market

• Autorzy: Paweł Niedziółka
• Języki publikacji: EN

Abstrakty

EN

Recently, the syndicated credit market has been developing very dynamically, which on the one hand was caused by relatively high profitability on the secondary market (despite a downward tendency and ever increasing use of the market flex clause) and on the other, by a low share of default exposures. The observed structural changes indicate a growing importance of credits with speculative ratings and consequently with a higher credit risk. The development of the market of syndicated credits, which in Poland perform the function of the most important instruments of credit risk transfer, is determined by the issue of instruments monitoring debtor's economic and financial position when there is a lack of direct relation between the debtor and crediting banks. The issue becomes especially important in the view of repeatedly identified dichotomic division of the market into arranging and crediting banks. The aim of this article is to define covenants and outside ratings' potential as crucial (next to the Marking-To-Market evaluation) factors restricting information asymmetry and increasing possibilities of exposure monitoring by crediting banks. (original abstract)

Słowa kluczowe

EN

Credit market; Syndicated loan; Financial covenant

PL

Rynek kredytów; Kredyt konsorcjalny; Kowenanty finansowe

• Czasopismo: Studia i Prace Kolegium Zarządzania i Finansów / Szkoła Główna Handlowa
• Rocznik: 2007
• Numer: z. 83
• Strony: 74--85

Twórcy

autor

Paweł Niedziółka

• Szkoła Główna Handlowa w Warszawie

Bibliografia

• Armstrong J., The Syndicated Loan Market: Developments in the North American Context, Working Paper 2003-15, Bank of Canada, June 2003.
• Bavaria S., To Our Clients in the Syndicated Loan Market, Standard & Poor's, 18th March 2004.
• Emery K., Ou S., Characteristics and Performance of Moody's - Rated U.S. Syndicated Bank Loans. Special Comment, Moody's Investors Service. Global Credit Research, March 2004.
• Gadomski W., Nobel z ekonomii w 2001: za niepełną informację, "Gazeta Wyborcza" of 10.10.2001.
• Gadomski W., Zabawa w upadanie, "Manager Magazin", edycja polska, Nr 6 (7), czerwiec 2005.
• Grzegorczyk W., Mniej wspólnego finansowania, "Rzeczpospolita" of 17.1.2003.
• Grzegorczyk W., Mniej wspólnych pożyczek, "Rzeczpospolita" of 19.1.2005.
• Grzegorczyk W., Najwięksi ciągle potrzebują pieniędzy, "Rzeczpospolita" of 24.1.2002.
• Grzegorczyk W., Pożyczali na spłatę pożyczek, "Rzeczpospolita" of 19.1.2006.
• Guide to Syndicated Leveraged Finance, LMA, 2006.
• Humphreys K., Overview of the European Syndicated Loan Market, Mizuho Corporate Bank Ltd, October 2006.
• Investing in loans globally, LSTA Annual Conference, October 2006.
• May W., Verde M., Loan Volumes Surge, Covenants shrink In 2005, Credit Market Research, FitchRatings, April 2006.
• Miller S., A syndicated loan primer w: Standard & Poor's: A guide to the loan market, September 2005.
• Olszak M., Międzynarodowy rynek instrumentów transferu ryzyka kredytowego, "Bank i Kredyt", Nr 3/2006.
• Ranson B. J., The Growing Importance of Leveraged Loans, "The RMA Journal", May 2003.
• Yago G., McCarthy D., The U.S. Leveraged Loan Market: A Primer, Milken Institute & The Loan Syndications and trading Association (LSTA), October 2004.
• www.gospodarka.gazeta.pl (data as of 25.12.2006).