[Sascha Steffen, Oliver Bosch, E-Finance Lab]

In our talk, we draw from several papers associated with our research on syndicated loan agreements. Key ingredient in all papers is the existence of informational frictions between borrowers and lenders which induce several problems: Firstly, informational frictions worsen within syndicate moral hazard problems which finally determine the structure of the lending syndicate. Secondly, they constitute not diversifiable risk and are therefore priced in the loan contract. Furthermore, they induce a hold-up problem between borrowers and lenders which induce an informational rent for the arranging bank. We further address the endogenous link between syndicate structure and loan spreads and provide evidence for the importance of bank-borrower relationships.