Friday Seminar - "Navigating New Norms: The Response of LBO Financing to Post-Crisis Regulation and Market Shifts" - Rüdiger Fahlenbrach (EPFL)
"Navigating New Norms: The Response of LBO Financing to Post-Crisis Regulation and Market Shifts"
Abstract: Banks incurred large losses from their exposure to committed but unfunded LBO deals during the global financial crisis. Post-crisis, banks significantly changed their LBO lending practices. Private equity sponsors provide about 40% more equity. Lending syndicates are larger, per lender exposure decreased, and non-banks provide more of the term funding. The portion of LBO debt retained by the lead arranger and not passed through became more expensive compared to debt held by non-banks. Investigating what explains these changes, we find evidence that the regulation of leveraged lending and shifts in the syndicated loan market significantly influenced banks’ LBO lending post-crisis.
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Room A720, SSE main building, entrance via Bertil Ohlins Gata 4 at 10:30
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Room A720, SSE main building, entrance via Bertil Ohlins Gata 4 at 10:30
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