Participants' reputation in the syndicated lending market

How do lenders use their reputation when participating in syndicated loans? I address this question by focusing on syndicate composition with respect to participants' reputation and its impact on loan spreads. I find that lender reputation enables it to compete in terms of choosing the types of loans to be involved in, so more reputable lenders participate in loans to safer, more transparent, and larger borrowers. In general, more reputable lenders participate in loans with more market finance features, rather than bank finance. However I find no evidence that lenders use their reputation and the corresponding market power for direct price competition. Any significant price effects of participants' reputation seem to aid the certification process, rather than exploit their market power