Graduation Year
Fall 2011
Document Type
Campus Only Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics
Reader 1
Manfred Keil
Reader 2
Gregory Hess
Terms of Use & License Information
Rights Information
© 2011 Kevin T. Sullivan
Abstract
The financial crisis of 2008 had systemic implications in the financial services industry spilling over into sectors such as the leverage loan market. I use regression analysis between two data sets (before and after the crisis) to understand the determinants of loan spreads for corporate loans of $100 million and larger, particularly the determinants which constitute bank effects, of the lead lending bank in the loan. I find that the effect of bank monitoring power is not a significant determinant of loan spreads, bank risk was significant before the crisis but not after, and bank size is significant both before and after. There is an inverse relationship between bank size and loan spread such that firms looking to take out a loan would receive a lower spread by mandating a larger bank as the lead arranger, and there is no longer a premium for mandating lead banks with less risk.
Recommended Citation
Sullivan, Kevin T., "The Effects of the 2008 Financial Crisis on the Role Of Bank Characteristics in Pricing of Loans in the Leveraged Loan Market" (2011). CMC Senior Theses. 288.
https://scholarship.claremont.edu/cmc_theses/288
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.
