Dissertação de mestrado em Finanças; No contexto das Fusões e Aquisições (F&A), a evidência de que os advisors financeiros têm
objetivos conflituantes com os interesses das empresas que representam, abre novos caminhos
à investigação científica. Este facto, juntamente com a recente consolidação do sector bancário
conduz à principal questão deste estudo: A presença de relações anteriores entre empresas e
advisors acrescenta ou destrói valor à transação? São consideradas duas hipóteses: Efeito de
certificação e Conflito de interesses.
Foram definidas doze variáveis dummy, cada uma representando uma relação decorrente de
três tipos de atividades: emissão de capital, fusões ou aquisições e crédito bancário. Calcularamse
os retornos anormais acumulados (CARs) para a empresa compradora e empresa alvo,
seguindo-se uma análise econométrica univariada e multivariada. Um total de 459 transações,
compreendidas entre 1990 e 2011, foram analisadas.
À existência de uma relação anterior entre a empresa alvo e respetivo advisor, estão associados
CARs médios significativamente mais baixos, comparativamente com as empresas onde tal
relação não se verifica (14,16% versus 19,47%). Este resultado é desfavorável à hipótese de
efeito de certificação para o advisor da empresa alvo. Verificou-se ainda...
In this paper, we investigate whether securitization was associated with risky lending in the corporate loan market by examining the performance of individual loans held by CLOs. We employ two different datasets that identify loan holdings for a large set of CLOs and find that adverse selection problems in corporate loan securitizations are less severe than commonly believed. Using a battery of performance tests, we find that loans securitized before 2005 performed no worse than comparable unsecuritized loans originated by the same bank. Even loans originated by the bank that acts as the CLO underwriter do not show underperformance relative to the rest of the CLO portfolio. While there is some evidence of underperformance for securitized loans originated between 2005 and 2007, it is not consistent across samples, performance measures, and horizons. Overall, we argue that the securitization of corporate loans is fundamentally different from securitization of other asset classes because securitized loans are fractions of syndicated loans. Therefore, mechanisms used to align incentives in a lending syndicate are likely to reduce adverse selection in the choice of CLO collateral.
This dissertation consists of three chapters that examine the importance of commercial banks in the financing decisions of corporations. The first chapter focuses on syndicated loans. The syndicated loan market is an increasingly important source of corporate finance, with over $1 trillion in new syndicated loans signed annually. The first chapter empirically explores the syndicated loan market with an emphasis on how information asymmetry and renegotiation considerations influence syndicate structure and the choice of participant lenders. There are two principal findings. First, when the borrower requires more intense investigation and monitoring effort by a financial institution, the lead arranger retains a larger portion of the loan, forms a more concentrated syndicate, and chooses participants that are closer to the borrower (both geographically and in terms of previous relationships). The evidence is consistent with moral hazard in a setting of information asymmetry. The lead arranger attempts to guarantee due diligence effort by increasing its risk exposure, and the lead arranger chooses lenders that minimize information asymmetry. Second, when the borrower is more likely to need to renegotiate the loan agreement, lead arrangers add participants with very small portions of the loan to the syndicate. Given that unanimity of lenders is needed to renegotiate major terms of the loan...
Global financial markets were largely
stable during the past year, not with-standing the recent
uptick in volatility amid uncertainty over the timing of an
eventual tapering off of quantitative easing. Improved
financial conditions are reflected in a strong rebound in
gross capital flows (international bond issuance,
cross-border syndicated bank loans and new equity
placements) to developing countries, which were 63 percent
higher in the first five months of 2013 than during the same
period in 2012. Foreign direct investment (FDI) inflows to
developing countries increased by 9 percent during the first
quarter of 2013 on a year-on-year basis, with a mixed
picture across countries. Since late May, financial market
volatility has increased, with increased expectations about
possible tapering of U.S. quantitative easing in coming
months and uncertainty over its impacts. Although there have
been some large stock market corrections in some Asian
countries, so far the overall impact has been moderate. Bond
yields on developing country debt are also on the rise as
base rates and spreads increase.
We study the effect of social capital on financial capital. Specifically, we study how similarity (matching) of borrowers’ and lenders’ cohorts along their corporate social responsibility dimension affects the cost of debt financing. The main finding is that borrowers’ ethical posture alone is not enough for obtaining cheapest rates. Favorable loan conditions are obtained when both lenders and borrowers belong to similar cohorts attributing high value for social responsibility aspects. Employing an international database composed of 4,554 syndicated loans involving 175 corporations in 15 different countries for the period 2003-2006 we document a large and significant reduction in lending rates when both borrowers and lenders belong to similar cohort along the social responsibility dimension. These results withstand a battery of robustness tests.
This study examines empirically how bank regulations adopted in lender countries influence the characteristics of loan contracts, using a sample of 46,453 loans made by 278 large commercial banks around 39 countries, to borrowers in 83 countries, in the period from 1998 to 2006. Our findings indicate that the stringency of capital regulations have an inverse U-shaped relationship with priced risk characteristics (spread and maturity) of loan contracts. In addition, more powerful official supervision is associated with riskier loan contracts. Both official supervisory power and private monitoring work as substitutes to capital regulation to reduce the (priced) risk measures of loan contracts when capital stringency is low. For higher capital stringency, supervision and private monitoring complement capital regulation in reducing loan contracts risk measures. Finally, we found that a country’s degrees of legal enforcement and bank industry competition complement capital and private monitoring regulations to improve risk characteristics of loan contracts. The evidence highlights the importance of how bank lending practices are affected by bank regulations and their interactions with themselves and other institutional country factors.; The authors wish to thank the financial support of the Ministerio de Ciencia y Tecnologia from Spain (grant # SEJ2006-09401).
This note examines the extent to which
firms in Latin America have been able to raise capital
through debt and equity securities as well as syndicated
loans, both abroad and domestically, since the onset of the
2008 global financial crisis. The public and the private
sectors alike lost access to foreign sources of financing
during the height of the turbulence. Furthermore, two months
after the Lehman Brothers' collapse, only government
owned firms and governments themselves were able to re-enter
international markets to some extent and raise capital.
Thus, the evidence suggests an important role for government
guarantees in attracting foreign investors in times of high
risk aversion. In domestic and syndicated loan markets,
there has been a marked decrease in the total amount raised,
although they have remained a viable option for the private
sector in Latin America. To the extent possible,
non-government borrowers have been able to raise capital in
these markets and have generally met their rollover needs.
This paper describes how Latin America
and the Caribbean has been integrating financially with
countries in the North and South since the 2000s. The paper
shows that the region is increasingly more connected with
the rest of the world, even relative to gross domestic
product. The region's connections with South countries
have been growing faster than with North countries,
especially during the second half of the 2000s.
Nevertheless, North countries continue to be the
region's principal source and receiver of flows. The
changes reflect significant increases in portfolio
investments, syndicated loans, and mergers and acquisitions.
Growth of greenfield investments has been more subdued after
the initial high level. Greenfield investments in the region
have been in sectors in which the source country has a
comparative advantage, not where the receiver country has an
advantage. Mergers and acquisitions have been in sectors in
which the receiver country has a comparative advantage.
The legal and institutional framework
governing creditor rights and insolvency proceedings in
Chile reasonably complies with expectations of a modern,
credit-based economy, although some shortcomings affect the
full effectiveness of credit risk management and resolution:
Financial institutions over-rely on real estate as
collateral. Pledges are not enough developed because
legislation on secured interests over movable assets is
fragmented and the publicity and registration mechanism for
pledges are not sufficiently reliable. Individual
enforcement proceedings are lengthy and complicated, both
for secured and unsecured creditors. Enforcement proceedings
using executory instruments take 1 to 3 years, whereas
creditors not enjoying such instruments use ordinary
proceedings whose duration is even longer (3 to 5 years).
Insolvency legislation is integrated into the country's
broader legal and commercial system, providing a liquidation
proceeding whose average duration, however, is 2 to 3 years.
The Insolvency Law also governs judicial reorganization
proceedings but classification of creditors for voting is
This thesis conducts empirical studies related to financial institutions and corporate finance. Specifically, I look at banks’ lending behavior, performance of leveraged buyouts (LBOs), and the cultural impact on cross-border LBOs. Following an introduction in Chapter 1, in Chapter 2, I study U.S. commercial banks’ herding behavior in their domestic loan decisions, where herding is defined as the extent to which banks deviate from the industry average lending decisions and collectively increase or decrease loans to certain categories. I find significant evidence that herding exists and that banks tend to herd more when the economic condition is less favorable, regulation is tight, and when banks are struggling . Overall, these findings support the hypotheses of information asymmetry and regulatory arbitrage as motivations for herding.
Chapter 3 provides a comprehensive study of LBO deal characteristics, participants’ involvement, and their impact on target firms’ performance. I find that better post-buyout operating performance is associated with larger amounts of leverage added during the LBO process, tighter LBO loan covenants, and equity contribution by target firms’ incumbent management. LBOs are more likely to exit through an IPO or a sale if they use more bank debt with tighter covenants and are sponsored by private equity (PE) firms of high reputation. These results suggest that the main source of value creation in LBOs is the reduced agency costs through the disciplining effect of debt...
We investigate the effects of bank control over borrower firms whether by representation on boards of directors or by the holding of shares through bank asset management divisions. Using a large sample of syndicated loans, we find that banks are more likely to act as lead arrangers in loans when they exert some control over the borrower firm. Bank-firm governance links are associated with higher loan spreads during the 2003-2006 credit boom, but lower spreads during the 2007-2008 financial crisis. Additionally, these links mitigate credit rationing effects during the crisis. The results are robust to several methods to correct for the endogeneity of the bank- firm governance link. Our evidence, consistent with intertemporal smoothing of loan rates, suggests there are costs and benefits from banks’ involvement in firm governance.