The pricing of sustainable syndicated loans

Bibliographic Details
Main Author: Alves, Paulo
Publication Date: 2023
Other Authors: Gonçalo, Jorge, Pinto, João M
Format: Article
Language: eng
Source: Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
Download full: http://hdl.handle.net/10400.14/47488
Summary: This paper provides a comparative analysis of sustainable and conventional syndicated loan spreads and pricing. Using a cross-section of 24,962 syndicated loan tranches closed between 2018 and 2022 in OECD countries, we show that sustainable and conventional loans are differently priced, spreads of sustainable versus conventional loans do not differ significantly, and banks rely on contractual, macroeconomic, bank syndicate structure, and borrowers’ characteristics when pricing sustainable tranches. At the deal-level, our results do not support the hypothesis of sustainable debt financing as a mechanism for reducing firms’ funding costs. We also find that economies of scale, institutional, and information asymmetry arguments affect firms’ choice between sustainable and conventional syndicated deals.
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spelling The pricing of sustainable syndicated loansESGSyndicated loansCredit spreadsLoan pricingCost of borrowingThis paper provides a comparative analysis of sustainable and conventional syndicated loan spreads and pricing. Using a cross-section of 24,962 syndicated loan tranches closed between 2018 and 2022 in OECD countries, we show that sustainable and conventional loans are differently priced, spreads of sustainable versus conventional loans do not differ significantly, and banks rely on contractual, macroeconomic, bank syndicate structure, and borrowers’ characteristics when pricing sustainable tranches. At the deal-level, our results do not support the hypothesis of sustainable debt financing as a mechanism for reducing firms’ funding costs. We also find that economies of scale, institutional, and information asymmetry arguments affect firms’ choice between sustainable and conventional syndicated deals.Universidade Católica PortuguesaVeritatiAlves, PauloGonçalo, JorgePinto, João M2024-12-10T17:17:32Z2023-11-112023-11-11T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.14/47488enginfo:eu-repo/semantics/openAccessreponame:Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)instname:FCCN, serviços digitais da FCT – Fundação para a Ciência e a Tecnologiainstacron:RCAAP2025-03-13T13:43:31Zoai:repositorio.ucp.pt:10400.14/47488Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireinfo@rcaap.ptopendoar:https://opendoar.ac.uk/repository/71602025-05-29T01:59:14.766866Repositórios Científicos de Acesso Aberto de Portugal (RCAAP) - FCCN, serviços digitais da FCT – Fundação para a Ciência e a Tecnologiafalse
dc.title.none.fl_str_mv The pricing of sustainable syndicated loans
title The pricing of sustainable syndicated loans
spellingShingle The pricing of sustainable syndicated loans
Alves, Paulo
ESG
Syndicated loans
Credit spreads
Loan pricing
Cost of borrowing
title_short The pricing of sustainable syndicated loans
title_full The pricing of sustainable syndicated loans
title_fullStr The pricing of sustainable syndicated loans
title_full_unstemmed The pricing of sustainable syndicated loans
title_sort The pricing of sustainable syndicated loans
author Alves, Paulo
author_facet Alves, Paulo
Gonçalo, Jorge
Pinto, João M
author_role author
author2 Gonçalo, Jorge
Pinto, João M
author2_role author
author
dc.contributor.none.fl_str_mv Veritati
dc.contributor.author.fl_str_mv Alves, Paulo
Gonçalo, Jorge
Pinto, João M
dc.subject.por.fl_str_mv ESG
Syndicated loans
Credit spreads
Loan pricing
Cost of borrowing
topic ESG
Syndicated loans
Credit spreads
Loan pricing
Cost of borrowing
description This paper provides a comparative analysis of sustainable and conventional syndicated loan spreads and pricing. Using a cross-section of 24,962 syndicated loan tranches closed between 2018 and 2022 in OECD countries, we show that sustainable and conventional loans are differently priced, spreads of sustainable versus conventional loans do not differ significantly, and banks rely on contractual, macroeconomic, bank syndicate structure, and borrowers’ characteristics when pricing sustainable tranches. At the deal-level, our results do not support the hypothesis of sustainable debt financing as a mechanism for reducing firms’ funding costs. We also find that economies of scale, institutional, and information asymmetry arguments affect firms’ choice between sustainable and conventional syndicated deals.
publishDate 2023
dc.date.none.fl_str_mv 2023-11-11
2023-11-11T00:00:00Z
2024-12-10T17:17:32Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10400.14/47488
url http://hdl.handle.net/10400.14/47488
dc.language.iso.fl_str_mv eng
language eng
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Universidade Católica Portuguesa
publisher.none.fl_str_mv Universidade Católica Portuguesa
dc.source.none.fl_str_mv reponame:Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
instname:FCCN, serviços digitais da FCT – Fundação para a Ciência e a Tecnologia
instacron:RCAAP
instname_str FCCN, serviços digitais da FCT – Fundação para a Ciência e a Tecnologia
instacron_str RCAAP
institution RCAAP
reponame_str Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
collection Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
repository.name.fl_str_mv Repositórios Científicos de Acesso Aberto de Portugal (RCAAP) - FCCN, serviços digitais da FCT – Fundação para a Ciência e a Tecnologia
repository.mail.fl_str_mv info@rcaap.pt
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