Journal Article

Structure and pricing of large bank loans


Abstract: This paper examines the characteristics of large bank loans as a form of corporate finance. We compare the characteristics of a sample of these loans with private placements and public issues of debt. The unique features of large bank loans that may encourage firms to continue using this source of financing include: borrower flexibility in deciding on the timing and amount of borrowing; the use of fixed-spread floating rate of interest, flexibility of changing and renegotiating contract features, such as covenants, during the life of the contract.

Keywords: Bank loans; Interest rates;

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Bibliographic Information

Provider: Federal Reserve Bank of San Francisco

Part of Series: Economic Review

Publication Date: 1995

Pages: 52-62

Order Number: 3