Discussion Paper No.22: The syndicated credits market

Transcription

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;'. . �
I
Bank of England
• I
Discussion Papers
No 22
The syndicated credits market
by
ID Bond
March 1985
No 22
by
ID Bond
March 1985
The object of this series is to give a wider circulation to research work being undenaken in the Bank and
to invite comment upon it; and any comments should be sent to the International Financial Markets
Group, International Division, at the address given below. The views expressed are theirs, and not
necessarily those of the Bank of England.
Issued by the Economics Division, Bank of England, London, EC2R 8AH to which requests for
individual copies and applications for mailing list facilities should be addressed; envelopes should be
marked for the attention of the Bulletin Group.
©Bank of England 1985
ISBN 0 903312 73 5
ISSN 0142-6753
THE SYND I C ATED C R ED I TS MARK E T
Pag e
Co n t e n t s
I
II
I NTRODUCT I ON AN D OVE RV I E W
T h e co n t e x t o f s y n d i c ated l e ndi ng
S c ope and s t r u c t u r e of t h e pape r
,
6
OPE RAT I ON OF THE M A RKE T
7
pu t t i n g tog e t h e r a
T h e p r im a ry m a r k e t :
s y n d i c a ted c r edi t
t r a n s a ct ion s i n
T h e s e conda ry m a r k e t :
e x i s t i ng p a r t i c i p a t i o n s
10
III
BANK OF EN GLAN D DATA
12
IV
MARK E T DEVE LOPM E N T S 196 8-1984
14
Th e o r i g i n s o f t h e s y n d i c a te d e u r o c r e di t s m a rk e t
196 8-1971:
t h e e a r l y ye a r s
1972-1975:
ad v a n ce a nd r e t r e a t
1976 -1978:
c o ns o l i d a t i o n a n d r e c ov e ry
1979-1981:
t h e s e c o n d o i l s ho ck a n d some e a r l y
cas ua l t i es
1982-1984:
deb t c r i s i s a nd i t s a f t e r m a t h
, 4
16
17
20
F E ATUR E S OF THE M A R KE T
31
T h e s c a l e a nd s t r u c t u r e o f m a r k e t ac t i v i t y
Lev e l s o f m a rk e t a c t i v i ty
Lo a n s i z e d i s t r i b u t i o n
S t ock o f s y n d i c a te d c r ed i t s a n d n e t
s yn d i c a te d le ndi n g
Comp a r i s o n o f t h e g r ow t h o f s y n d i c a t e d
l e ndi ng w i t h t h a t o f B I S da t a o n n e t
i n t e r n a t io n a l b a nk l e nd i ng
31
31
V
B a nk s ' i nv o l v e me n t a s m a n ag e r s o f sy n d i c a t ed
c re d i t s
VI
8
23
27
33
36
39
41
Te rms a n d cond i t i o n s i n t h e m a rk e t
R a n g e and d i v e r s i ty o f s pr e ads a nd
m a t ur i t i e s
c r os s- s e c t io n a l
S p r e ad s g r ad i e n t s :
r e s u l t s f r om s p r e ad s a n d m a t u r i t i e s d a t a
Lo a n s pr i ce d ov e r U S p r i m e r a t e
T h e impo r t a n c e o f f e e s
T h e e f f e c t s o f t a x a t io n
45
T HE FU T U R E OF THE MAR KE T
62
R E FE RENC E S
ANNEX 1
AN N E X 2
M E T HODOLOGY
BANK O F EN GLAND DA TA :
COUN T R Y CLA SSI F I CA T I ON
TA B L E S 1 T O 16
46
48
50
54
57
l
T H E SYND I CATED CRED I TS MARKET
!
I
I NT RODUCT I ON AN D OVE RV I EW
1
The 1 9 7 0 s were yea r s o f m a r k ed ch a n ge i n the pa t t er n a n d
of
i n t er n a t i o n a l
f i nanc i a l
co n t r i b u t i o n t o the i r
t h e les s s et t l ed
f l ows ,
a n d o f the c o mmer c i a l b a n k s '
They we r e a l s o n o t a b l e
i n ter med i a t i o n .
f i n a n c i a l a n d e c o n o m i c env i r o n men t :
m a n y co u n t r i e s r e a ch ed leve l s
s i gn i f i c a n t l y h i gher
a d op t ed amo n g s t
i n d u s t r i a l i s ed c o u n t r i e s ;
vola t i le a n d a t
t i �es ver y h i gh ;
in
in
the pr i ce o f o i l
i n s t r umen t
for
i n ter n a t i o n a l
the
P a r t l y as a r es u l t of
bec a u se o f the
the s ynd i c a t i on pr o ce s s ,
i n ter n a t i on a l
lend i n g -
in
i t s ter m s - t o m u ch c l o s er s c r u t i n y th a n be f o r e .
the i n for m a t i o n a v a i l ab l e f r om the s t u d y o f th i s
the i n s i gh t s
of
( pr i m a r i l y be ca u se o f
l e n d i n g by ba nk s a n d ,
opened u p the det a i l s o f b a n k s '
is
i n teres t r a t es we r e
the s ynd i ca t ed c r ed i t be c a me the pre fer r ed
w i de pub l i c i t y g i ven t o dea l s a s pa r t o f
pa r t i c u l a r ,
th a n h a d bec ome
r e l a t i ve t o o ther
commod i t i e s a n d t o m a n u fa c t u r ed good s ) .
these d eve l opmen t s ,
in
i n f l a t i on
a n d there were s ubs t a n t i al
the pa t t er n o f wea l th h o l d i n g
m a s s i ve i n c r ea ses
for
f r eel y f l oa t i n g e x ch a n ge r a t es wer e w i dely
a c cep t ed a s n o r m a l ;
ch a n ge s
s cale
i t g i ve s
i n t o bank s '
It
i n s t r umen t a n d
a c t i v i t i e s wh i ch a re the f o c u s
th i s p a per .
The con tex t o f
s yn d i c a t ed l e n d i n g
The t r a n s f o r m a t i o n o f the s t r u c t u r e o f wor l d c a p i t a l f l o w s i n
2
the 1 9 7 0 s h a s been w i de l y d o c u men t ed .
I t w a s ch a r a c ter i s ed by
2
1
2
Th i s pa per h a s been p r epa r ed by the Ba n k o f En g l a n d ' s
I n t er n a t i on a l F i n a n c i a l Ma r k et s G r ou p , member s o f wh i ch h a ve
m on i t or ed the deve l o pmen t of the s yn d i c a t ed c r ed i t s m a r k et
s i n ce i t s i n cept i o n .
I t i s m a i n l y the w o r k o f I a n Bond a n d
( f or t h e t a x e l emen t s o f s ec t i on V ) S i m on Topp i n g - a s s i s t ed
by Den n i s J on e s ( s e c t i o n I V ) a n d S i m o n T o pp i n g ( s e c t i on s I I
a n d I I I ) - b u t d r a w s hea v i l y on e a r l i e r w o r k by member s o f the
G roup .
The c o n t r i b u t i o n o f C l i ve Br i a u l t t o the ea r l y s t a ge s
o f i t s pr od u c t i on w a s p a r t i c u l a r l y v a l u a b le .
A n u mber o f
col lea g ues h a v e m a d e he l p f u l c ommen t s :
mos t notabl y ,
So t oo d i d
C A E n o ch , D G H o l l a n d a n d L D D P r i ce .
R M P e c ch i o l i ( OE C D ) .
The a u th o r s a r e o f c o u r se r es pon s i ble
for a n y er r o r s wh i ch r em a i n .
See , f o r e x a m p le , S t a n yer a n d Wh i t l ey ( 1 9 8 1 ) .
2
banks assuming a predominant role in cross-border financing particularly to the more wealthy of the less developed countries and taking over from multilateral institutions and governments the
largest share of international flows to all but the poorest
countries
(which still rely extensively on aid
concessional flows).
euromarket activity.
This is reflected in the
and other
rapid growth of
From small beginnings in the 1950s,
eurocurrency lending had grown to $1000 bn by end-1980
$85
bn at end-1970).
banks'
(from only
Lending to final borrowers of nearly
$600 bn was supported by an active interbank market which served
as a wholesale money market for,
deployment of,
and permitted the efficient
eurocurrency funds.
Banks'
international foreign
currency lending was transformed from being predominantly
short-term and trade related into a much longer-term form,
playing
a vital
role in many less developed countries.
decade,
it was an essential component of the inflows needed to
finance
payments imbalances and maintain growth rates and
development plans
growing world,
3
which,
though
By the end of the
they seemed sustainable in a
have proved not to be in harsher times.
Several forces lay behind
this transformation.
3
Perhaps
the most fundamental was that many banks were anxious to expand
their international activities.
They saw the international field
as one in which they could expand free of the many restrictions
and limitations of their domestic activities:
and international
lending not only looked profitable-but also held out the prospect
of
further diversification of risks and a degree of insulation
from the effects of domestic economic downturns.
This strategy
of internationalisation parallelled and was in part driven by that
of
banks'
industrial customers,
who frequently provided banks -
through their demand for financial services to support their own
international expansion international arena.
with the
initial
At first it was only the largest banks who
took advantage of the opportunities,
in the early
3
1970s by
led by US banks but followed
their European and Japanese counterparts:
The internationalisation of banks'
for example,
impetus to enter the
Pecchioli
(1983).
activities is surveyed in,
3
fe l t.
the m a 1n Arab ba n k s h a ve made the i r pre s e n c e
l a tter l y ,
the i r w a k e ,
m a n y s m a l ler ba n k s - wh i ch
In
i n r etr o s pect m a y s e em
i l l -equ i pped t o h a ve bec o me i n v o l v e d to the e xtent th e y
d i d - bec a me s wept u p i n the pr oces s .
4
Sec ond ,
the t wo o i l
shock s h a d a s i g n i f i c a nt i m pa ct on th e
patte r n o f wea l th h o l d i n g a n d on the need
for
f i n a n c i n g d u r i n g th e
per i od s o f a c commod a t i on to the c o n sequent ch a n ges
p r i ces .
At a ver y s tr a i gh t f o r w a r d leve l ,
a n y a l ter a t i o n i n the
patte r n o f wea l th h o l d i ng neces s a r i l y h a s a n
of
f i nanc i a l
f l ow s ;
g r eater dem a n d s
i f on l y
i n re l a t i v e
i mpa ct on the patte r n
a n d o i l - i mpor t i n g c o u ntr i e s u n d o ubted l y made
for
f unds
i n the w a k e of
the t wo o i l pr i ce h i k e s ,
to ea se the i r a d j u s tmen t to the new r ea l i t i e s .
m o r e i mpo r ta n t l y f o r the f o r m o f the f l o ws ,
f i nan c i a l
Pe r h a p s
the n ew l y -emer g e d
s u r p l u se s wer e i n the h a n d s o f econom i c a ge n t s - mo st
nota bl y ,
o i l p r od u cer s - w i th a r e l a t i ve p r e fer e n ce f o r ba nk
depo s i t s
as a med i u m i n wh i ch
o i l p r od u cer s '
s h o r t pe r i od s
s u ppl i er s ,
these
s u ppl y o f
ch a l l e n ged
Th o u gh the
f u n d s to the e u r om a r k ets h a s o n l y
in
( p r ed om i n a n t l y d o l l a r - denom i n a ted )
f o r ba n k s t o a t t r a ct
funds
t o a s s i s t them i n
s t r ateg i c ob j ect i ve o f s h i f t i n g the ba l a n ce o f
the i r por t f o l i o s t owa r d s
At the s a me t i me ,
i n ter n a t i o n a l a s sets .
the h i gher a n d m o r e v o l a t i le r ates o f p r i c e
i n f l a t i on m a y h a ve g i v e n ba n k s a n a d v a n ta ge i n
i nter med i a t i n g
between s u r p l u s a nd de f i c i t s ec t or s a r ou nd the wo r l d .
bank s
for
i mpo r ta n ce th a t o f t h e m o r e f a m i l i a r
th i s p r e f e r e n ce m a de i t ea s i er
s at i s f y i n g the i r
5
to h o l d the i r wea l th .
Ce r t a i n l y ,
sh owed them s e l ves t o be mo r e p r ep a r ed t o u n de r t a k e
f l oat i n g - r ate i n t e r med i a t i on t h a n the se c u r i t i es
devel opme n t a nd w i d e s p r e a d u se o f
e u r om a r k e t s s u g ge s t s ,
perh a p s ,
se i ze the i r oppor t u n i t y ,
se c u r i t i es m a r k ets t o o f fe r
.dec i s i ve ;
a ct i v i t i e s a n d h a d
th a n a n y i nher en t
i n f l a t i on and
f l o a t i n g- r a te
when ba n k s were l ook i n g
i t w a s the ba n k s '
f l oa t i n g - r a te i n s tr u men ts
i n the
r ea d i ne s s to
wh i ch wa s
i n te r e s t r a tes
i n ter med i a t i on
f o r e x pa n s i o n o f th e i r
The
i n a b i l i ty of the
f l o at i n g - r a te i n s t r umen t s ,
b u t the vo l a t i l i ty o f
u nd o ubted l y f a vo u r ed
f l o a t i n g-r a t e pape r
that
r athe r
i nd u s t r y .
j u s t at a t i me
i nte r n at i o n a l
r ea d y t o h a n d .
4
6
A
final relevant factor is the speed with which banks proved
able and willing to respond to the increasing demands placed upon
them as a result of the developments already noted.
Though those
responsible for the provision of funds through official channels
were aware that undue reliance on commercial flows might not be
ideal, there was on their part some relief that the strains posed
by the very large volume of "oil funds" were being dealt with
smoothly by the world banking system,
acquiesced in the substantial
shift
and they by and large
in the balance between
commercial and official funding which was thereby set in train.
They were to a large extent pre-empted by the eagerness of
commercial banks to fill the need for intermediation,
reduced their own need to respond.
For their part,
doubtless saw benefits in commercial, unconditional,
which
borrowers
loans - once
they were available - and became reluctant to return to the
discipline of borrowing from multilateral agencies and the
limiting conditions frequently
to government,
7
attached to bilateral,
government
loans.
How do syndicated credits fit into this picture?
In purely
numerical terms, there is now something in the region of $400 bn
outstanding in syndicated form, and in 1981 - the peak of market
activity - some $130 bn of new loans were announced.
compares
This
with total net international bank lending - as measured
by the BIS - of some $1,100 bn at end-1983, and outstanding
international bond issues of about $300 bn.
4
There are,
course, other channels of medium-term bank financing:
foreign loans
important.
in banks'
8
increased sharply
and floating-rate euromarket paper is becoming more
But it
is syndicated lending which now predominates
longer-term claims.
The influence of the syndicated credit on the development of
the euromarkets and of banks'
is less easy to establish.
4
traditional
(that is, loans in the domestic currency of the
lending bank) are still made - and have
recently:
of
Source:
Orion Bank
involvement in
Certainly,
(1984)
international lending
the syndicated credit has
5
pr oved a n
of
i n s t rumen t c a pab le o f mob i l i s i n g subs t a n t i a l qua n t i t i e s
fun d s w i th the m i n i mum o f c om p l e x i t y or de l a y,
i m por t a n t
f a c t o r enabl i n g ba n k s t o r e s pond qu i ck l y t o the dem and s
m a d e on t h e f i n a n c i a l
th a t ,
and was a n
w i thout
th i s ,
s ys tem dur i n g t h e 1 9 7 0 s .
ba n k s wou l d n o t h a ve been as
i n ter med i a t i n g c r o s s - bor der
f l ow s a n d th a t ,
s h a r e o f c l a i m s wou l d n o t h a ve r i s en
a l s o a r guab l e th a t
It
i s a r guab le
suc ce s s ful
a s a resul t ,
so qu i ck l y o r
so
in
the i r
It
far .
the ver y s i mp l i c i t y o f s yn d i c a t ed c r ed i t s and
the ea se w i th wh i ch even s ma l l
and
i n t er n a t i o n a l l y i ne x per i en c ed
banks
cou l d p a r t i c i pa t e i n them mea n t th a t the r a n ge o f ba nk s
d r awn
i n t o i n t er n a t i o n a l
i dea l .
lend i n g w a s b r oa der
O n these a r gumen t s ,
s yn d i c a t ed c r ed i t
is
th a n wou l d h a ve b e e n
wh i ch c a r r y some we i gh t ,
the
i s n o t s i m p l y the veh i c le thr ough wh i ch banks'
s t r a t eg i es h a v e been r ea l i sed bu t wa s a pr i me f o r ce beh i n d the
momen tum bu i l t up by the eur oma r k e t ,
pa r t of
9
p a r t i cu l a r l y i n the l a t ter
the 1 9 7 0 s a n d ear l y 1 9 8 0 s .
Never the l e s s ,
it
i s ea s y to go t oo f a r
i n a t t r ibut i n g a c au s a l
r o l e t o the s yn d i c a ted c r ed i t a n d t o the i mpor t a n ce o f the o i l
sh o c k s
in
g r owth 0f
i t s deve l o pmen t .
It
the synd i c a ted c r ed i t
i s d i s cu s s ed
i n s ec t i on I V ,
is ,
f i rst o f a l l ,
n o t able th a t
m a r k e t w a s r a p i d be f o r e 1 9 7 3 :
f r om s m a l l be g i n n i n g s
i n 1 9 68,
s yn d i c a t ed c r ed i t wa s a l r e a d y a s i g n i f i c a n t veh i c l e for
wel l be f o r e " O PEC sur p l u s es " a n d
i s sues .
It
as
the
lend i n g
" r e c y c l i n g " be c a me po l i c y
i s a l s o r e l e v a n t th a t eu r om a r k e t pa pe r
s a t i s f y i n g m a n y of
the
i s now
the need s prev i ou s l y met b y s yn d i c a t ed c r ed i t s ,
s o there d oe s n o t seem t o be a n yth i n g u n i que i n the s ynd i c a t ed
c r ed i t ' s ab i l i t y t o s a t i s f y b o r r ower s '
need s .
The s a fes t
c o n c l u s i on
i s p r obabl y the s i m p l e one th a t
bene f i t t ed
f r om be i n g the mos t e f fe c t i ve i n s t r umen t t o h a n d wh e n
the need wa s g r e a t e s t ,
a n d th a t
i ne x t r i c a b l y l i nk ed w i th th a t o f
d i f f i cu l t
i f not
o n the o th e r .
its
the syn d i c a t ed c r ed i t
sub s equen t dev e l opmen t
the eur om a r k e t s a s
th a t ,
s pe c u l a t i o n a s
l i t t le v a l ue .
the one
to wh a t wou l d h a v e
h a ppe ned h a d the synd i c a t ed c r ed i t n o t e x i s t ed
so
to make it
i mpo s s i b l e t o d i sen t a n g l e the e f fe c t s o f
Beyon d
is
i s pr ob a b l y o f
6
Scope and structure of the paper
10
The Bank of England's International Financial Markets Group
has been compiling data on the syndicated credits market since
197 2 ,
with particular emphasis on information relating to market
conditions.
The primary purpose of this paper is to make these
data and the statistics derived
from them more widely available.
Its secondary purpose is to provide sufficient detailed
information on the construction and interpretation of the figures,
on the economic background to the market's development and on the
operation of the market to facilitate their use by those not
already familiar with them.
It does not attempt to provide a
thorough theoretical analysis of the market or of the many
interesting facets of behaviour. which the data highlight - largely
because of space constraints - nor does it explore the important
policy issues connected with banks'
11
international activities.
The next three sections provide some of the basic background
to understanding the market and the International Financial
Markets Group' s statistics:
section II briefly describes the
operation of the syndicated credits market
(both primary and
secondary) and is followed by an overview of
the criteria used in
the compilation of the statistics - the details of which are set
out in the Annexes�
market
section IV documents the development of the
from its inception to date,
environment in
outlining
the economic
Section V contains the
which this took place.
bulk of the original material presented in this paper and provides
statistics - many of which have never been available before derived from the basic data.
The final section offers a brief
assessment of the prospects for the syndicated credit.
12
The major part of the statistical information contained in
this paper is set out in tables 1 to
together at the end.
16 ,
which are gathered
Most of these contain time series of annual
and quarterly data for the full period
into nine geographical areas.
1972 to 1984,
disaggregated
The various charts presented in
the body of the paper are largely drawn from this
information.
7
II
OPE RAT I ON OF THE MARKE T
13
S y n d ic a te d c r ed i t s a re l o a n s a r r a n g e d t h r o u g h a g r o u p o f b a n k s
a n d r a n g e i n s i z e f r om l e s s t ha n $ 1 m n t o m o r e t ha n $5 bn , t h oug h
t he majo r i t y o f pub l i c i se d d e a l s a r e fo r am o u n t s be twe e n $1 0 m n a n d
$200
mn;
t h e m i n i m u m con t r i b u t i o n of an y o n e ba nk i s r a r e l y l e s s
t h an $ 1 mn �
T h e f un d s a r e a l mos t a l w a y s p r ov i d ed a t a r a t e o f
i n t e r es t wh i ch v a r i e s ove r t h e l i f e o f t he l o a n a n d i s e x p r e s s ed a s
a spr e a d ( m a r g i n ) o v e r a r e f e r e n c e r a t e re l a t ed t o b a nk s '
co s t s .
f und i n g
Th e mo s t common r e f e r e n c e r a t e i s L I BOR ( Lo n d o n I n t e r b a n k
O f f e red R a t e )
f o r t h e c u r r e n cy i n q u e s t i o n - t yp i c a l l y U S d o l l a r s -
t ho u g h dome s t i c r a t e s s u c h a s U S p r i me a r e a commo n l y av a i l a b l e
opt i o n .
14
S e r v i c i ng pa yme n t s a r e m a d e a t r eg u l a r r o l l o v e r d a t e s , wh i ch
mo s t commo n l y f al�
eve ry s i x mo n t h s - t ho u g h o n e , t h r e e a nd twe l v e
m o n t h r o l l o ve r s a r e po s s i b l e .
D u r i ng t h e g r a c e pe r i od , wh i ch m a y
t y p i c a l l y b e a s m u c h a s h al f t he l i f e o f a n o rm a l l o a n , o n l y i n t e re s t
p ayme n t s a r e m a d e;
t he s e a re c a l c u l a t e d by appl y i ng to t h e am ou n t
o u t s t a nd i n g s i n ce t h e p r e v i o u s r o l l o v e r t h e s u m o f t h e sp r e ad a n d
t h e v a l u e o f t he r e f e r ( .�e r a t e r u l i ng a t t h e p r ev i o u s r o l l ove r d a t e
( a l t h oug h fo r some l o a n s a s l i g h t l y d i f f e r e n t p r o ce d u r e i s fol l ow e d
- s e e t h e s e c t i 0n o n U S p r i m e o n p p 5 0 t o 54 b e l ow ) .
amo r t i s e d ( t h a t i s , p r i n c i p a l i s r ep a i d )
Th e l o a n i s
i n e q u a l i n s t a l me n t s
o n r o l l ov e r d a t e s f al l i n g i n t he r epaym e n t pe r i od .
15
A l t houg h t h e r e i s n o s t a nd a rd f e e s t r u c t u r e fo r s y n d i c a te d
c r ed i t s , t wo m a i n t yp e s o f f e e m a y b e i d e n t i f i ed .
Th e f i r s t a r e
o n e - o f f f r o n t - e n d f e e s p ay a b l e t o t h e l e ad m a n ag e r wh e n t h e d e a l i s
s i g n ed :
t he s e a r e m ad e u p o f a p r a e c i p i um ( a s m a l l p e r ce n t ag e o f
t h e t o t a l am ou n t o f t h e d e a l - a l mo s t a l w ay s r e t a i n e d b y t h e l e ad
m a n a g eme n t g r ou p ) ;
a n amo u n t t o cove r e xp e n s e s ;
a nd u nd e rw r i t i n g
a n d p a r t i c i pa t i o n fe e s , r e f l e c t i n g t h e l ev e l s o f e a ch m e m b e r o f t h e
g r o u p ' s o r i g i n a l com m i t me n t s a nd f i n a l r e t e n t i o n s.
T h e se cond a r e
a n n u a l f e e s f o r t he m a n ag em e n t g r o u p a n d o t h e r p a r t i c i p an t s i n t h e
f o rm o f a comm i tm e n t fe e o n u n d i sb u r s e d comm i t me n t s ( o r f ac i l i t y fe e
f o r s t a n d by f a c i l i t i e s ) a nd ,
5
f o r t h e a g e n t , a n a n n u a l ag e n cy f e e .
T h e s t r u c t u r e o f t h e m a rk e t i s e x am i n ed i n mo r e d e t a i l i n S e c t i o n
V b e l ow , p p 3 3 t o 3 6 .
8
T h e pr i m a ry mark e t :
(i)
16
p u t t i n g t og e t he r a synd i cated c r ed i t
6
b i d d i n g fo r t h e m a n da t e
T h e p r o cess o f putt i n g t og e t he r a sy n d i cat ed c r ed i t m a y b e
i n i t i a t e d b y e i t h e r bor r owe r o r b a nk s :
t h e bo r rowe r may i n fo r m ba n
w i t h whom i t h as r eg u l ar d eal i ng s t h a t i t i s i n t he m a r k e t fo r f u n d
o r i t s b o r r ow i n g p l an s may b e we l l - p u b l i c i se d g e n e r al l y ;
banks may
b e l ook i ng for l e nd i ng oppo r t u n i t i e s o r a c t i ng on t he i r ow n i n i t i a t
b y appr o ac h i n g bo r rowe r s t h o u g h t t o b e l ook i n g f o r f un d s .
17
On ce i t i s c l e a r t h a t a d eal i s i n t he o f f i n g , c ompe t i ng b a n k s
w i l l o f t e n app r o a c h t h e bo r r owe r w i t h r i v a l b i d s fo r t h e bo r r owe r ' s
m a n d a t e to a r rang e t he d eal .
The b i d d i n g may be f rom s i n g l e banks
f r om g ro u ps of bank s , o r f r om smal l g r o u p s o f fe r i n g a c l u b d e a l
( somewhat a k i n t o t he pr i va t e pl aceme n t o f a se cur i ty iss ue ) wh i ch
wo u l d no t r eq u i r e a ny f u r t h e r s y n d i cat i o n .
18
At·�h is s t a g e t he borrowe r w i l l no rmal l y h ave s pe c i f i ed on l y t
amo u n t i t wa n t s to b o r r ow , t h e t i � i ug , a nd perh a ps s ome i d e a of t h e
t e rms i t e x p e c t s .
A f te r app r opr i a t e a n al y s i s o f t h e bor rowe r ' s
c r ed i t wo r th i n ess , a n d hav i n g d e v i s ed a sy n d i c a t io n s t r a t egy , r i v a l
b i d s w i l l be subm i t t ed t o t h e bor rowe r s pe c i fy i n g t h e te rms o n wh i c
e a ch b a nk o r g ro u p o f b a nks i s p r e p a red t o approach o t h e r b a n k s .
O f fe rs m a y b e f u l l y u n d e rw r i t t e n ,
i n wh i c h c a s e t he l e nde r s g u a r a n t
t h a t t h e f u l l am o u n t o f t h e l oa n w i l l b e ava i l a b l e , o r on l y o n a
"best e f fo r ts" bas i s ,
i n wh i c h case the s u c c ess o f the d e al d ep e nds
on i t s m a rk e t r e c e p t i o n .
At s u b se q u e n t neg o t i a t i ng s es s io n s f ur t
d e t a i l s o f t e rms , f e e s , l eg al d oc u me n ta t ion a nd t h e s yn d i c a t i o n
s t ra t e g y wi l l b e ag r e ed , u n t i l t h e bor r owe r i s co n t e n t t o ac cept
o f f e r a n d g i v e a ma n d a t e to t he l e ad m a n a ge r s to beg i n s yn d i c a t i o n .
6
F o r a m o r e de t a i l e d e x pos i t i on o f t he synd i c a t i o n p r o cess a nd
l eg a l aspe c t s o f sy n d i cat ed l oa ns , C h as e Me r c h a n t B a nk i n g G r o up
( 1 981 ) , McD o na l d ( 1 9 8 2 ) , S l at e r ( 1 982 ) a nd UN ( 1 98 3 ) a r e use f u l
s ou r c e s .
9
s y n d i c a t i o n s t r a t eg y a n d m a n a g e m e n t r ol e s
( ii)
19
I t w i l l n o r ma l l y t a k e abou t two mo n t h s fr om aw a r di ng t h e
m a nda t e ( " a n no u n c eme n t " ) t o s i g n i ng t h e de a l
r
( " compl e t i o n " )
?
A s we l l a s a s s i s t i n g t h e bo r r owe r i n t h e pr epa r a t i o n of an
d
I n fo rma t i o n Memo r a n dum a n d t h e l o a n do cum e n t a t i o n , t h e l e ad m a n a g e r
y
w i l l co n t a c t pe r h a p s h u n dr e ds o f o t h e r b a n k s l ook i n g fo r r e c r u i t s to
t
jo i n t h e m a n agem en t group or t h e g e n e r a l syn d i c a t e .
D i ffe r e n t
m a n ag e me n t ro l e s a r e offe r ed a c co r d i ng t o t h e amo u n t e a c h b a n k w i l l
commi t ;
t ho s e com m i t t i n g a s m u c h a s t he m a nd a t e h o l de r s m a y become
s
jo i n t l e ad m a n ag e r s , wh i l e t ho s e comm i t t i ng l e s s m a y be m a n a g e r s o r
s
eo - m a n ag e r s .
s
o n e of t h e m a nd a t e d ba nk s ) , wh o di s t r i b u t e s t h e i n t e re s t du e to
A n ot h e r r ol e i s t h a t o f a ge n t ( wh o w i l l pr oba b l y be
p a r t i c i pa t i ng b a nk s a nd ,
i f p r o b l e m s a r i s e d u r i ng t h e l i fe of t h e
l o a n , h a nd l e s a l l de a l i ng s be twe e n t h e bor r ow e r a nd t h e l e nd i n g
b a nk s .
T h e ma n ag e m e n t g r o u p m a y t h e n s e l l down pa r t o f t h e i r s t ak e t o
t
20
e
s m a l l er pa r t i c i pa n t s i n t �e m a rk e t .
Tr ad i t i o n al l y , pe r h ap s 3 0- 4 0 %
of t h i s s t a k e wo u l d be s o l d dow n , a l t ho u g h wh e n m a r k e t cond i t i o n s
a r e d i ff i c u l t - a s t h e y h a v e b e e n r e ce n t l y , w i t h m a n y o f t h e sm a l l e r
p a r t i c i p a n t s w i t hd r aw i n g from t h e m a r k e t - i t i s di f fi cu l t t o s e l l
down any bu t t h e ve ry b e s t - r a t ed c r e d i t s .
I f , tog e t h e r w i t h the
amou n t t he m a n a g e m e n t g r o u p h a s r e t a i n ed , m o r e i s r a i s e d f r om t h i s
qe n e r a l synd i c a t i o n t h a n i s r eq u i r ed , t h e l e a d m a n ag e r m a y offe r t h e
b o r r owe r t h e oppo r t u n i t y t o i n c r e a s e t he s i z e o f t h e l o a n , t he
pe r c e n t a g e s o l d down by t h e m a n ag em e n t g r o u p m a y b e i n c r e a s ed , o r
pa r t i c i pa t i o n s m a y b e s c a l e d d ow n .
21
O n c e t he t o t a l am ou n t o f t h e l o a n h a s be e n s ec u r e d a n d t h e
do cume n t a t i o n compl e t ed , t h e d e a l w i l l n o rm a l l y b e s e a l e d by a
s i g n i n g ce r emony a nd f r e qu e n t l y m a r k e d by t h e p ub l i c a t i o n i n t h e
pr e s s o f a " t omb s t o n e " s e t t i n g o u t t h e m a i n d e t a i l s o f t h e de a l a nd
t h e n am e s a nd r o l e s o f t h e l e ndi n g b a n k s .
7
Ta b l e 6 p r e se n t s some d a t a o n t he a v e r ag e t i m e be twe e n
a n n o u n ceme n t o f a d e a l a n d i t s c ompl e t i o n .
10
T h e sec o nd a ry m a rk e t :
t r a nsac t i on s i n e x ist i ng pa r t i c i p at i o n s
22
W i t h t h e not abl e e x cep t io n o f t r a ns f e r ab l e l o a n f a c i l i t i e s - a
ve ry re ce n t i n n ov a t i o n - wh i c h p r ov i d e e xp l i c i t l y fo r second a ry ma r
t r ad i ng , pa r t i c i pat i o ns i n syn d i c a t ed c red i t s a r e not d es i g n e d to b
n e got i ab l e :
t h e ba nks who i n i t i a l l y l e n d t he f un ds a r e pr e s umed to
w a n t t o hol d t h e ass e t u n t i l ma t u r i t y .
Ne v e r t h e l ess , so me t r a n s f e
o f e x i s t i ng p a r t i c i p a t i o n s d o t a k e pl ace .
De t a i l s o f tr a nsa cti o n s
a n d t h e amo u n ts i n v o l v e d ar e ra r e l y pub l i c i sed , so t h e r e i s no f i r m
e v i d e n ce o n wh ic h to q u a n t i fy t ur nov e r i n t he second ary m a rk e t
( t ho u g h i t se ems t h a t t he gre a t m a j o r i ty o f d e a l s i n vol ve q u a l i t y
l o ans) .
Howe ve r , act i v i t y se ems to be sm a l l i n rel a t i o n t o t h e st
o f c r ed i ts o u t s t a nd i ng .
S e v e r al l ar ge b anks h ave r e c e n t l y d e ve l op
a c t i v e a sse t s a l es prog r ammes , wh i c h sug ge sts t h a t a c t i v i ty may be
i n c re a s i ng - o r , a t l e a st , t h a t se cond a ry tr ad i ng o f pa r t i c i p at i o n s
i s becom i n g a n e x pl i c i t b a l a n ce she e t m a na g em e n t too l .
Th e r e h av e
r e ce n t l y al so be e n we l l - p ub l i c i se d r e po r ts tha t tr ad i ng o f c l a ims o
t r oub l ed d e b tors h a s d e v e l ope d , b u t a g a i n su c h d e al s repr e se n t onl y
sm a l l f r a c t i on of t h e d e b t ou tst and i ng a nd t end to t ak e the f o r m o f
swa ps of c l a ims on one t ro u b l ed d e b t o r fo r those on anot h e r .
23
S ub - p a r t i c i p a t io n s , a s on-sol d p a r t i c i pa t io n s a re usu a l l y
c a l l ed i n t he
UK,
h ave t r ad i t io n a l ly se rved t h r e e ma i n pu rposes .
F i rst , t h ey m a k e spa c e a v a i l a b l e i n t h e b al a n c e s h e e t o f th e se l l i
b a nk fo r f u r t h e r l oa ns a nd t he f e es wh i ch c a n be e a r n ed on t hem .
S econd , t h ey e n a b l e pu r c h as i ng b a n k s to b u i l d up a po r t fo l i o q u i ck l
- t h i s h as b e e n a n impo r ta n t mot i v a t io n f o r se con d a ry m a r k e t ac t i v i
by n ew e n t r a n ts t o t he m a r k e t .
o f l o a ns .
Th i r d , t h ey perm i t t he
"
r e-p ack ag i
Th is o f t e n t ak e s t h e form o f "ma t u r i ty s t r i pp i ng " :
o n -se l l i n g as sho r t- t e rm d e b t a n i n t e rmed i at e pa r t o r t h e rema i n i ng
po r t i o n o f a l on g e r - t e r m l o a n .
By a l t e r i ng t h e e f f e c t i v e m a t u r i ty
o f t he l oa n i n t h i s way , b an k s not w i sh i ng to t ak e o n a l o ng - t e rm
com mi tme n t ar e g i v e n l im i t ed a c c ess to t h e syn d i c a te d c r ed i t s
m a rk e t .
24
Th e m ot i v a t io ns f or t he r ec e n t l y r epo r t ed t ra d i ng in c l a i ms on
t r oub l ed d eb t or s m a y be r a t h er d i f fe r e n t .
S u ch tr ad i ng may b e mo re
d e pe nde n t on d i f f e r e n ce s be twe e n b a nk s in p e r c e p t i o n o f re l a t i v e
r isk , or be u se d by a b a nk t o r ed u c e t h e con ce�t r a t i o n o f r i sk i n i
b a l a n c e sh e e t an d so re d u c e i ts v u l n e ra b i l i t y to i n t e r r u p t i on s
11
i n d e b t se rv i c i n g o r t o a s s e t l o s s e s .
Th e r e may b e a n ad d i t i o n a l
a
s t im u l u s to su c h d e a l s f r om d i f fe r e n c e s b e t we e n co u n t r i es i n
a nd ,
supe rv i so ry a t t i t ud es t o pr ov i s i o n i ng and c ap i t a l adeq u a cy;
r
pe rh aps a l so impo r t a n t , d i f f e r e n ce s i n t a x r e g imes .
25
0
er
An impo r t a n t pro b l em w i t h su b-p a r t i c i pa t i o n s is t h a t t h e i r
enfo r c e a b i l i t y a n d l eg a l st a t u s m a y o f t e n be ope n to q u e s t i o n
�
s
T h e o n l y way t o be su r e t h a t t he sub- p a r t i c i p a n t h a s f u l l a nd d i r e c t
m
r e cou r s� to t he bo r r owe r a nd t h a t t h e o r ig i n a l l e n d i ng b a nk i s f r e e o f
a ny ob l 1g a t io n to e i t he r o f t h em i s t o o b t a i n t h e bor rowe r ' s
p e rm i ssi o n fo r t h e t r a ns f e r .
Th i s i s n o t o f t e n d o n e , e i t h e r be c a u s e
t h e o r i g i n al b a n k d o e s n o t w a n t to a f f e c t i t s s t a nd i ng w i t h t h e
lP
b o r rowe r o r be c a u se t h e bor r owe r m i g h t n o t b e w i l l i n g t o s e e i t s
o b l i g a t i o n s t r a ns f e r r ed - a n d be c a u se o f t he c osts i nv o l ved ( a n ew
s
l o a n d o c u me n t wo u l d be n e e d e d ) ;
sub- p a r t i c i p a t io ns a r e the r e f o r e
e
f r eq u e n t l y " s i l e n t " a nd so o f un c e r t a i n v a l id i ty .
0
m a i n me t h ods o f t r a ns f e r
y
o f a t r u st a n d eq u i t ab l e ass i g nme n t ( used w h e n a su b - l o an is
f
c o n t empl a te d ) - i t wou l d s e em t h a t o n l y t h e f i r s t i s f u l l y w a t e r t i g h t .
Of t h e fou r
subst i t u t i o n , l eg a l ass i g nme n t , fo rma t i o n
Th e po t e n t i al f o r c o n f l i c t w a s we l l i l l u st r a t e d by a ca s e p u t b e f o re
t h e US c ou r ts t uw a rd s t h e e n d o f 1983 ( bu t subse q ue n t l y w i t hd r awn ) by
M i c h ig a n N a t i o n a l B a nk of D e t r o i t , wh i c h a t t emp t e d to sue C i t i b a nk
( t he o r i g i n a l l e nd i ng b a nk ) o v e r a $5 mn su b - p a r t i c i pa t i o n i n a Peme x
l o a n w h i c h w a s c a ug h t up i n d e b t r e n e g o t i a t i o n s .
26
Th o ug h t he m a ny compl e x l e g a l
i s s ue s r a i s ed b y su b - p a r t i c i p a t io n s
i n e x i st i n g l o a ns r em a i n l ar g e l y un r e so l ved , t h e r e h av e b e e n mo ve s
r e ce n t l y to a l l ow e x p l i c i t l y i n� l o a ns f o r se cond a ry t r ad i ng i n
p a r t i c i p a t io ns .
.g
y
n o t e d a b o ve .
Th is ,
i t i s hoped , w i l l c i r cu m v e n t t he d i f f i c u l t i e s
S u c h t r a ns f e r ab l e l o a n f a c i l i t i es ( o r t r a ns f e r a b l e
l o a n i nst r ume n t s , d e pend i n g o n t h e pr e c i se f o r m a t adop t ed ) a d d t o
t h e sy n d i c a t ed c r e d i t m a ny o f t h e t r a d e a b i l i ty a t t r i bu t es o f
se cu r i t i es , a nd m a y i f w i d e l y ad opt ed b r i ng a b o u t some c o n ve r g e n ce
o f t h e e u r o - c r ed i t a nd e u r op a p e r m a rke t s .
As ye t , howe ve r , t h i s i s
s t i l l a n i n no v a t io n a n d e xp e r i e n c e o f i t s e f f e c t i v e n ess i s co n s e q u e n t l y
n
l im i t e d .
e
8
i
B r ay (1984) a nd Ry a n (1984) p r ov i d e u p- t o - d a t e e x pos i t ions o f
t he l e g a l i ssue s r a i sed by su b -p a r t i c i pa t io ns a nd t h e t e c h n i q ue s
u sed i n t h e m a rke t .
12
Ill
BAN K OF EN G LAN D DATA
Th e B a nk o f E n g l and ' s I n te r nat io n a l F i nan c ial Ma rk e t s G r ou p ha
27
b e e n co l l e c t i n g a n d co l l a t i n g i n fo rm a t ion on p u b l i c i se d synd i c a t ed
c r ed i t s s i n ce 1 9 72 .
Th e d a t a are comp i l ed f r om a n umbe r of so u r c e
t h e s e i n c l u d e t he d a i l y pr e s s , s pe c i al i s t we e k l y a nd mont h l y
p ub l i c a t io n s , a nd any ot h er f o rm o f pub l i c annou n c eme n t .
Th e
p r i n c i p a l obj e c t ive o f t h i s mo n i to r i ng i s to a s s e s s m a r k e t cond i t io
r a t h e r t han to me a s ur e t he l ev e l an d d i r e c t io n o f cap i t al f l ows
preci sely .
Fo r t h i s r easo n , pa r t i c u l ar a t t e n t ion i s pa i d to t h e
t e rm s on w h i ch mand a t e s ar e awa rd e d and par t i c i pat ion se cu r e d .
I t i s t h e d a t e o f an nou n c em e n t t ha t i s t ak e n as t h e key re fe r e n ce
po i n t ( t houg h i n f o rm a t io n on c ompl e t i o n d a t e s i s a l so re cord ed ) whe
c on s t r u c t i ng t ime se r i e s of re l e v a n t m a g n i tu d e s .
28
Th e c r i t e r i a f or i nc l u s io n o f par t i c u l ar c r ed i t s ar e d e s c r i b ed
d e t a i l i n A n n e x 1 ; b r i e f l y , t h e c r ed i t s m u s t be n ew, pub l i c i s ed l oa
m a d e by groups o f ban k s to r e s id e n t s or non- r e s id e n ts , wh i ch ar e i n
currenc
n t o t he l o c a t i o n o f a t l eas t some o f t h e l e nd i n
and w h i c h have a n o r i g i nal f i n al m a t u r i ty o f o n e year o r mor e .
C r ed i to r go�e r nme n t ·g u a r ari t e ed e x p o r i- r e l at e d l oan s a n d fo r e i g n
( c r os s- bor d e r l oan s mad e i n t he d ome s t i c c u r r e n cy o f t h e l e nd i n g
bank s ) a r e e x c l ud ed , a s a r e s t and by fa c i l i t ie s and ot h e r l oa n s wher
t h e r e i s s tr on g e v i d e n ce t o s ug g e s t t ha t t h e f un d s have no t be e n
u s ed .
29
Th e Bank o f E n g l and i s not t he o n l y or gan i sat i on mon i to r i ng t h
mark e t .
Reg u l a r d a t a o n s yn d i cat ed c r e d i t s a r e a l so prod u c ed by
o t h e rs :
t h e b e s t k n own so u r ce s a re pr o bab l y t h e O rg an i sat i o n fo r
E co n om i c C o-Ope rat i o n a n d D e v e l opme n t ( O ECD ) - whos e dat a , t og e the r
w i t h an anal y s i s o f mark e t con d i t i o n s , a ppear reg u l ar l y i n t h e i r
p u b l i cat i o n F i nan c i al Mar k e t Tr e n d s - a nd t h e Mo rgan Gu a r an ty T r u s t
Comp a ny - who pub l i sh t h e i r d a t a i n Wor l d F i nan c i al Mar k e t s .
Th e
Wo r l d Bank ( I B RD ) , who wo r k e d c l os e l y w i t h t h e O ECD i n t h i s area ,
c e as ed t h e i r a ct i v i t i e s i n 1 98 1 .
9
Un t i l 1 9 79 , o n l y l oa n s o f t h re e y e a r s o r more o r i g i nal f i nal
b e f o r e t h at dat e , l oan s of s ho r t e r
ma t u r i ty a r e i n c l ud ed ;
ma t u r i ty we r e appar e n t l y o f l i t t l e impo r t an c e .
13
30
De t a i l e d comp a r i so n o f t h e d a t a prod u c e d b y e a c h of th e s e
o r g a n i s a t io n s i s d i f f i c u l t .
�
F i r s t , o n l y t h e O E CD f i g u r e s a r e ba s e d
o n l o a n compl e t io n s , wh i ch a r e c l o s e s t t o th e t r u e me a s u r e of new
3
� he
l e nd i ng a s wo u l d be g i v e n by d r awd own d a t a;
:e
o t h e r comp i l e r s -
i n c l ud i ng t h e B a nk o f E n g l a n d - mon i to r a n n o u n ceme n t s , so th e i r d a ta
m ay b e v i ewed mo r e a s me a s u r e s o f t he l e v e l o f a c t i v i t y o r buoy a ncy i n
t h e marke t .
io
S e cond , t h e d e f i n i t io n o f e u r o c u r r e n cy bu s i n e s s i s i n
p r a c t i ce d i f f i c u l t t o a pp l y pr e c i s e l y a n d may d i f f e r b e t we e n so u r c e s .
Th i r d , t h e r e may be d i f f e r e n ce s i n t h e comp r e h e n s i v e n e s s o f th e d a ta
c o l l e c t i o n u n d e r t ak e n by t h e v a r i ou s comp i l e r s .
31
Th es e d i f fe r e n ce s wa r n ag a i n s t u s i ng a c omb i n a t i o n of d a ta f r om
d i f f e r e n t sou r c e s b u t do not s u g g e s t a ny e a sy way of a s s e s s i n g t h e
s u pe r i o r i t y o f on e ov e r t h e o t h e r s : h i g h e r t ot a l s ,
f o r e x amp l e , d o
n o t n e c e s s a r i l y imp l y t h a t co l l e c t i o n i s more t ho r o u g h - t h ey may
:d
)a
in
s i mpl y i nd i c a t e a l oo s e r appl i c a t io n o f t h e e u r o c u r r e n cy d e f i n i t i o n
o r t h e i n c l u s i o n o f some fo r e i g n l oa n s .
As t h e c h a r t show s , how e v e r,
t h e b r o a d t r e n d s i n d i c a t ed by t h e d i f fe r e n t sou r c e s a r e v e r y s i m i l a r
u n t i l 19 8 2 .
Fo r t h e l a s t two y e a r s , c om p a r i so n i s compl i c a t ed by
t he d i f f e r e n t t re a tm e n t s a c c o r d e d to t h e r e s c he d u l i ng s a n d " n e w
money " p ack ag e s fo r t r ou b l e d d e b t o r s , wh i ct a r e e x c l u d e d f r om t h e
B a nk se r i e s shown be l ow ( b u t s e e S e c t i o n I V , p 2 8 ) .
:r
Comparison of data sources 1972-1982
Sbne
1SB
sse
th
Bank of [ngland
P1organ Quaran\ y
:!r
(1 )
O£CD
sea
see·
st
se
e
se
1972
19?4
(l) Total• for 1ater
loane.
19?6
yeare
I
1978
I
uae
fnolude ne"' 1110ney
note factlttfe• and takeover-related
1oana.
I
1982
I
1984
e
14
MARKE T D E VELOPMENTS
IV
1968-1984
The origins of the syndi cated eurocredits market
(a)
Development of the eu·
32
The origins of the eurocurrency markets are sufficiently well
1
documented not to need extensive repetition here
Briefly , a
�
series of political acts and fiscal measures in the US
(going back
at least as far as the attempt in 1948 by the US Treasury to block
the withdrawal of
$2 0 mn of Czech gold from the
F RBNY ) ,
the
significance of which was substantially increased by Europe's
general return to external convertibility at the end of 1958,
increasing impetus to the use of the euromarkets.
gave
The ready and
growing availability of US dollars held outside the US,
the overse
expansion of US b anks - which were inhibited by domestic regulation
and controls
from rapid home-based expansion -
and the growing
internationalisation of corporate activity created an environment i
which the euromarkets could flourish.
33
During the eurocurrency market's early years most cross-border
bank lending - apart from foreign loans - was in the
term trade
f inance funded by
short-term euro-dollar deposits,
at an agreed spread over a reference rate.
eurobond market,
US
the development of which
Interest Equalisation Tax
to July 1963),
onlen
There was also an acti
had been encouraged by th
(enacted September 1964 but retroactiv
which imposed on any investor purchasing foreign bo
issued in the US a penalty
amounting to about 1% over the prevailin
cost facing US domestic issuers.
presented by
form of short
Park
(1974),
The chart opposite,
drawing on d
illustrates the speed with which this ma
expanded following that initial stimulus.
11
Usef ul surveys include Bell
Johnston (1983).
(1973),
Clendenning
(1970) and
15
Inte�national
bond
tssues in Eu�ope
lbna
3
3
2
2
ro�• t '"
,
_
_
,
--- .-·----------------' ,
•
i
(b)
1!65
,
,
,
,
,
1!67
,
_
......,....... 1!169
,
', ,,
...
,''
/
'
,
,
e
1!71
S y n d i ca t ed l e n di n g
34
Alt h oug h t h e r e i s h i s t o r ical e v i de n ce o f s y n di c a t ed b a nk lo a n s a s
12
t h e mode r n con c e p t o f s y n d i c a t ed
e a r l y a s t h e 16 t h c e n t u ry ,
l e nd i n g h a s dev e l oped l a r g e l y cu r i n g t h e po s t-w a r pe r i o d .
.i
:h
.V
t h e U S h a d b eg u n t o m a k e med i um- t e rm l o a n s t o corpo r a t e bo r rowe r s i n
3
t he m i d- 1 9 3 0 s
h a v i ng pr e v i o u s l y m a d e s h o r t - t e r m ad v a n ce s of
�
l e s s t h a n one y e a r ' s m a t u r i ty wh i ch we re t h e n r e n ew e d .
Wh i l e
s e v e r a l b a nk s b ecame i nv o l v e d i n s uch bu s i n e s s i n t h e 1 9 3 0 s , dema n d
f r om t h e co r po r a t e s e ct o r f o r f i n a nce i n t h i s fo rm w a s n o t s u b s t a n t i a l
be fo r e 1 9 5 4 .
d
Ba n k s i n
From t h a t da t e - wh e n t h e U S t a x a u t ho r i t i e s rela x ed
t h e r u l e s g ov e r n i n g acce l e r a t ed de p r e c i a t io n - t h e r e wa s
a
r i se in
t he dem a nd f o r l a r g e - scal e me d i um - t e rm f u nds wh i ch i n t u r n l ed t o
t h e e v o l u t io n o f t h e a g e n cy s y n d i c at io n .
f i n a nc i n g w a s compl e t ed p r i v a t e l y ;
I n s uc h s y n d i c a t i o n s , t h e
t h e le a d b a nk a c t ed a s a n a g e n t
( t h o u g h i t r a r e l y r e ce i v e d a ny ag e n cy o r m a n ag eme n t fe e s ) a n d t ook
1 2 D a v i s ( 1 9 8 0 ) r e fe r s to t h e p r e v a l a n ce i n t h e m i d- 1 6 t h c e n t u r y o f
l o a n s t o g ov e r nme n t s by sy n d i c a t e s o f b a nk s f r om An twe rp a n d Ly o n s
w i t h o n e ag e n t b a n k wh i ch h e l d t h e c o l l a t e r al .
1 3 T h e f i r s t cor po r a t e te rm l o a n i s r e p u t e d to h av e b e e n by Fi r s t
N a t i o n a l B a n k o f B o s t o n t o Ame r ic a n M e t a l s Comp a n y i n 1 9 3 4 .
16
t h e l a rg e s t s h a r e a s r e c og n i t i o n o f i t s s t a t us w i t h t h e bo r r owe r.
The pa r t i c i pa t i o n reques t came f r om t h e bo r r owe r , n ot t h e l e ad ba n k :
t h e r e wa s n o con cept o f a m a nd a t e to a l e ad ma n a g e r o n t h e bas i s o f
ag r e e d t e r ms a n d co nd i t i o n .
T h e onus wa s on t h e corpo r a t e bo r r owe r
t o r a i se t he f un d s a n d neg o t i a t e t e rms wi t h e a ch o f t h e pa r t i c i p a n t
ba nk s s e p a r a t e l y .
1 96 8 - 1 9 7 1 :
35
T he e a r l y ye a r s
Th e r e i s n o s i n g l e , e a s i l y i d e n t i f i a bl e , f i r s t synd i c a te d
e ur ocur r e n cy c r ed i t .
R a t h e r , a num b e r o f ( pr e d omi n a n t l y pr i v a t e )
s y n d i c a t i o n s we r e und e r t ak e n dur i n g 1 9 6 8 a n d 1 9 6 9 , s i m i l a r i n form
t h e $ 1 5 mn l o a n sy n d i c a t ed by t h e B a nk o f London a n d Sout h Ame r i c a
( BOLS A )
f o r t h e Hung a r i a n A l um i n i um I n du s t ry , s i g n ed i n Jun e 1 96 8
�4
Un t i l t he l a t e 1 96 0 s , b a n k s d i d not appe a r t o r eg a rd synd i c a ted
l e nd i n g as a co n t i nu i ng l i ne of bus ines s but r a t h e r as a set of
spec i f i c ,
i nd e pe nde n t t r a n s a c t i on s , a nd the s t i mul u s to i t s e ur om a r
appl i c a t i o n i s un c l e a r .
F r om 1 9 6 9 , howe v e r, wi t h t h e e s t ab l i s hmen
i n L o n d o n o f a numbe r of i n t e r na t i o na l b ank s wh i ch comb i n ed me r ch a n
b a nk i ng s k i l l s w i t h te ch n i q ue s d e v e l oped i n t he eur obond m a r k e t , t h
a ppe a r ed t o b e some ch an g e i n b a n k s ' a t t i tud e s t o synd i c a t ed
e u r o cur r e n cy l e nd i n g .
Th e s ynd i c a t i o n proc es s wa s s t i l l s i m i l a r t
t h e ag e n cy ope r a t i o n i n t h e e a r l y ye a r s - i nvol v i ng a pr i v a t e
pl a c eme n t s t r a t e g y - t houg h l e ad b an k s we r e be g i nni ng t o appro a c h
o t h e r b a nk s t o f o r m s y n d i c a t e s .
( I t w a s not unt i l 1 9 7 2 /7 3
-
as 1
s i z e i n c r e a se d - t h a t t h e pr i v a t e pl a c em e n t s t r a t egy wa s s uppl a n t e d
a n un d e rw r i t i ng a n d synd i ca t i o n s t r a t e g y . )
Dur i ng t h i s pe r iod , a
s i g n i f i c a n t r o l e wa s pl ayed i n i t i a l l y by t h e UK m e r c h a n t b a n k s - as
a r r a n g e r s a nd a s l e nd e r s m a k i ng p r o f i t ab l e u se o f euro cur r e n c y
d e po s i t s - b u t i t wa s t he U S m o n e y c e nt r e b a nk s w h o a t t a i ne d a
d om i n a n t pos i t i on .
36
S t a t i s t i c s f o r t h i s pe r i o d ar e s c a r ce , n o t l e a st bec ause m a ny
o f t h e pr ima ry sour c e s wh i ch a r e now av a i l a b l e d id not com e i n t o
b e i n g un t i l t he e a r l y 1 9 7 0 s ;
a nd t h e pr e v a l e nce
of
pr i v a t e s y n d i c a
me a n t n o t on l y t h a t d e t a i l s o f l o a ns we r e o f te n vague or u n o bt a i n a b
b u t al s o t h a t i t wa s d i f f i c ul t t o d e t e rm i ne wh e t h e r a l o a n s houl d
14
Th e f un d s we r e p r o v i d e d by BOLSA a nd e ig h t o t h e r b a n k s , a n d t h e
l o a n w a s g u a r a n t e ed by t h e N a t i on a l B a nk o f H ung a ry [s e e B i ck n e
( 1 9 69 ) 1
•
17
q u a l i fy a s a synd i c a t ed c r ed i t .
Low ( 1 97 1 ) s ug g e s t s t h a t m e d i um-
t e r m e u r o- l o a n s ( o f wh i ch syn d i c a t ed l o a n s we r e proba b l y o n l y a
k:
f
er
t
p a r t ) we r e r u n n i n g a t b e t we e n $ 1 b n an d $ 1 . 5 bn pe r a n n um u n t i l t h e
l a t e 1 96 0 s , a n d M c Do n al d ( 1 9 8 2 ) e s t i ma t e s t h a t new s y n d i c a t ed loa n s
t o t a l l ed a bo u t $ 2 b n i n 1 96 8 .
By 1 9 7 0 , howev e r , we be g i n t o r e ach
f i rme r g r o u n d a s t h e s o u r c e s m u l t i pl y an d t h e c r i t e r i a appl i ed f o r
i n c l u s i o n be come be t t e r - d e f i n e d .
.
15
. f o rm a t 1o
a v a 1" 1 a b l e 1n
n.
T h e t a b l e be l ow s umma r i s e s t h e
S y n d i c a t ed l e nd i ng 1 96 8 - 1 97 2
S
bns
M cDon a l d
l
4
1 96 8
1 969
1 97 0
1 97 1
1 97 2
P a rk
1
OECD
Mo rg a n 3
Gu a r a n ty
Bank of
Eng l and
4. 7
4.0
6.8
7.4
2.0
8.6
1 1.4
3.6
6.2
4.7
4.0
6.6
8.7
P a r k ( 1 9 7 4 ) q u o t i n g F i n a n c i a l T i me s , 5 M a r ch 1 97 3 .
Th e f i g u r e s
q uo t ed i n t h i s sou r c e f o r t h e s to ck o u t s t a nd i ng ( $ 3 0 - $ 5 0 bn ) a r e
c l e a r l y i n cons i s t e n t w i t h t h e s e d a t a fo r n ew l o a n s , a nd may re l a t e
t o a b r o ad e r me a s u r e o f l e nd i ng .
2 Qu o t ed i n �en n i s ( 1 98 4 )
3 Qu o t ed i n Go odm a n ( 1 9 8 0 ) ;
t h e a u t ho r s h av e co n f i rm e d t he f i g u r e s
fo r 1 97 1 a nd 1 97 2 i n Wo r l d F i n a n c i a l M a r k e t s .
37
Th o u g h t h e i nc r e a s e i n a c t i v i ty o v e r t h i s pe r i o d w a s r e l a t i v e l y
r a p i d , t h e m a rk e t ' s e x p a n s ion w a s r e s t r i c t ed be c a u s e t h e c u s t ome r
b a s e w a s s t i l l dom i n a t ed by t h e ne eds o f US c o r po r a t i o n s ;
its
s u b s eq u e n t d e v e l opme n t wa s d e p e nd e n t u po n a b r o ad e n i ng o f t h e c u s tome r
b a s e t o i nc l ud e so ve r e i g n , pub l i c s e c t o r a n d E u r ope a n co rpo r a t e
b o r r owe r s .
as
1 97 2 - 1 9 7 5 :
38
a d v a n c e a nd r e t r e a t
T h e ye a r s 1 97 2 t o 1 97 5 e n comp a s s no t o n l y a pe r i o d o f co n t i n u i n g
r ap i d e x p a n s i o n a n d b r o ad e n i n g o f t h e sy n d i c a t ed cr ed i t s m a r k e t , b u t
a l s o t he f i r s t pe r io d o f re t r e n ch m e n t ,
i n t h e w a k e o f t h e t r o u b l ed
co nd i t i on s i n t h e e u r o c u r r e n cy m a r k e t s - a nd i n f i n a n c i a l m a r k e t s
ea
ab
ne
mo r e g e n e r a l l y - i n 1 97 4 .
15
B a nk o f E n g l a n d d a t a ( wh i c h a r e u se d
I t i s s ome t im e s d i f f i c u l t t o e s t ab l i s h t he i nd epe nde n ce o f e a r l y
so u r c es o f m a rk e t d a t a , t h oug h i t i s b e l i e v e d t h a t a l l t h o s e
s h own i n t he t ab l e a r e i n f a c t b a s e d on s e p a r a t e comp i l a t i o n s o f
s t a t i s t ic s .
18
A111 o u n t a
Ma�ke t
rataad
t ltfte
14 -
-
If -
-
Tet.a1
18 -
Per
14
If
18
1811
Ill
-
- I
4 -
- 4
! •
I
411
ze
- I
I
I I
1 172
I
I
I I
1 1 73
I
1 174
1
I
I I
1 175
�
-
-
-
I.
�
-�
-
•
by
•�e a
cent
-�
-
- .
ahares
vl!'?�
�1- I� . �t/
��
�t:£
�
·I· �· !:ll:
15<
-�
� .
� ��i�
��
� II �' �� " I-'
. � I�
I'� -
0
-
EJ
-
�
�
-��
� .. �
- ��
�b: �
. ! !;.
�15< :X
)< i
§•�: : �
��
�X
� :>·
��:
�
�
P- �� :
�:
11- �:
�
:
••
I
I
U72
throughout the remainder of this paper) show
1173
0
� !Lir
1174
�
.
�
-
-
1175
a very rapid rise in
activity in 1973, continuing into early 1974 but sharply reversed
later that year
and stable - at about the
1 9 73
level - in 1975.
increasing share of business involved loans to borrowers outside
OECD
area:
a combination of increasing competition in the market,
tightening of exchange controls in some industrial countries and t
emergence of substantial borrowing requirements
among the developi
countries - which the syndi cated loan proved ideally
- rapidly broadened the market.
The second chart - which shows
geographical breakdown in each quarter - illustrates this shift.
39
The latter part of this period provided the f irst real te sts o
the resilience of the eurocurrency
markets in general and of the
syndicated credit in particular.
Against a background of turmoil
in foreign exchange markets following the f ailure of the Smithsonia
agreement of December 1971,
rates from March 1973,
and the generalised floating of exchang
there were two ma j or shocks.
the sharp rise in oil prices in the second half of
"first oil shock",
pattern of
The first was
1 973 ,
the so-cal
and the consequent disru ption of the familiar
worl d capital flows.
The second was the disruption in
banking markets resulting from bank
failures,
the most notable and
significant of these casualties being the Franklin National Bank
(which collapsed in May 1974) and Bankhaus Herstatt
June of the same year).
(which failed i
19
40
Th e e f f e c t o f t h e s e s h o ck s i s ev i d e n t n ot o n l y i n t h e l e v e l s o f
a c t i v i t y but a l so - pe r h a p s mo r e s i g n i f i c a n t l y - i n t he te rms on
0
e
0
fJ
�
wh i ch f und s we r e m a d e a v a i l a b l e , t houg h t h e r e i s l i t tl e e v i d e n c e o f
a ny imme d i a te e f f e c t o f t h e M a r c h 1 97 3 e x c h an g e m a r k e t d e v e l opme n t s:
s pr e ad s co n t i nued th e i r downw a r d t r e nd un t i l t he f i r s t h a l f o f 1 97 4
a nd ma t ur i t i es d i d no t pe ak u n t i l t h e t h i r d qua r t e r o f 1 97 3 .
d own tur n i n ave r a g e m a t ur i t i e s i n t h e four t h qua r t e r o f 1 97 3
s t ar t o f a t r e nd w h i c h co n t i nued we l l
Th e
-
the
i n to 1 97 5 - m a y owe some t h i n g
t o t h e u n c e r t a i n ty e n g e nde r ed by d e ve l opme n t s i n bot h t h e fo r e i g n
t h e o i l p r i c e ros e by ab out 7 5 % i n t h e
e x ch a n g e a nd t h e o i l ma r k e t :
se cond h al f o f 1 97 3 a nd j umped a f ur t he r 1 2 5 % a t t h e e n d o f th a t
b u t t h e e v i d e n c e i s n o t con c l u s i v e .
ye a r ;
41
Th e c l e a re s t e v i d e n c e o f
e f f e c t s on t h e m a r k e t i s ,
I n t •�••t
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1 174
ILliOR-ava.of �atly
p r o v i d ed by t h e a f t e rma t h of
t he b an k i n g t r oub l e s i n
mid-1 974 .
Fo r a b r i e f
pe r io d , m a ny b a nk s '
f un d i n g
w a s put u n d e r s t r a i n a s
.
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I
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I
•
c o n f i d e n ce fe l l - p a r t i cu l a r l y
w i t h i n t h e i n t e r b a nk ma rk e t ,
wh i ch i s v i t al t o eurom a rk e t
16
. .
ac t 1v 1 ty .
F o r some 4 - 6
we e k s a f t e r t he c o l l apse o f
B a n k h au s H e r s t a t t , o n l y t h e
s t r on g e s t f o r e ig n a nd US
money c e n t r e b a n k s cou l d
r a i s e i n t e r b a n k f un d s a t
norma l r a te s .
Th e s e b a n k s
ng
s i mu l t a n e ou s l y r e d uc e d t h e i r
as
pl a c i n g l i ne s w i th
al
c o r r e s po n d e n t b an k s , e x c e p t t h o s e o f e q ua l s t a tu s .
Ou t s i d e t h i s
c i r c l e t h e r e wa s s ub s t an t i al t i e r i ng , w i t h p r em i a a s h i g h a s 2 %
n
be i n g f a c e d by J a p a n e s e a n d I t a l i an b a nk s a n d c e r t a i n sm a l l e r
d
b a nk s wh i ch r e l i ed he av i l y o n i n t e rb a n k fund i ng .
i
1 6 T h e op e r a t i o n a nd s i g n i f i c a n c e o f t he i n t e r n a t i o n a l i n te r b a nk
m a rk e t a r e d i s c u s s e d i n B I S ( 1 9 8 3 b ) .
20
42
A n impo r t a n t f a c t o r i n t h e pr i cing on
a
sy n dic a t ed cred i t
is
r e t ur n r e qui red by t h e marg in al bank t h e m a n a g e me n t gr oup aims to
attract as
a
pa r ticipa n t , so t he pr ev a l e n c e o f t i e r i n g
t
inev i t ab l y
put u pwa r d pre s s ur e on s pr e ad s - e v e n t h oug h some bank s coul d s t i l l
17
f un d t h ems e l v e s a t no rm al pr i ce s .
As t h e c h a r t
o ve r l e a f s hows ,
s p r e ad s cont i nue d to r i s e u n t il t he fir s t
half
Mo s t sig n i f i c a n t l y ,
f o r a l l g r oups o f bor rowe r s .
not
on sy n d i ca t ed c r e dit s we n t above 1% a nd did
pr eviou s l e ve l o f 0.5% u n t i l 1978
43
of
�
buoy a n t m a r k e t .
" le n d e r s ' m a r k e t " ,
the
return
lowe s t
to
s p r e ad
its
8
Th e cut b a ck i n le nding an d t he s t abil i s at io n
been
i n d i c a t e t h a t equi l ib r i um h ad
1 975 and d i d so
of
t e rms i n 1975
re-e s t ab l i s he d bu t
in
a muc h l e s
I t i s t emp t i n g t o c h a r a c t er i se th i s pe r i od as a
given
t h e sh o r t m a t u r i t i e s and
high
spr e ad s
( a l t houg h "in t e rm e d i a r i e s ' m a r ke t" mig h t be more appropria t e , a s it
w a s t h e b a n k s who b e n e f i t t ed from t h i s ) ;
bu t a more ac cur a te
be one of general
d e s c rip t io n woul d pe r h a p s
caution on
over-extending
b a nk s , wh o d i d no t wa n t to r i sk
the p a r t of
t hems elves .
The
gave them the capacity to strengthen
h ig h e r spr e ad s d o u b t le s s
re sour ces and d e f le c t ed the cri t i c i sm
which some had be en
t h eir
mak i n g
t h a t ma rg i n s we re i mp r ud e n t l y f i n e .
1976-1978:
44
c o n s oli d a t io n a n d re cov e ry
T h e ne x t t hr e e ye ars witn e s sed
gro w t h
t h e r e sump t i on o f ra pid
$65 b n
i n 1978 ag a i n s t
half
pr e d om i n a t e d - wit h abo u t 60%
of
of
f al t e r i n g wor l d e co nomic
i nc r e a s in g l y
widen ing
l ar ge
of the OPEC
the pa t te r
non-OECD borrowers
by
we ak
corporate demand
did not begin to revive until
for er
1978)
a nd
a ccompanied initially by
of payments f inancing requ irements.
s u rplu s
ye ar , b u t more t h a n o f f se t
t o tot
the market.
recovery,
bal a n c e
Continu ing
1 975 .
1974,
Th is pe r i od w a s ch ara ct e r i s e d
i n d om e s t i c m a rke t s ( which
the m a rk e t , wit
in the level of announcements
onl y $20 bn in
e s t ab l i s h ed in t h e s e c o n d
45
the recovery of
in
in
Th
1976 wa s reversed in the fol l owing
its effects on euromarket liq uid it y
t h e i n c re a sing US d e f i ci t .
17
I n t h i s and sub s eque n t ch a r t s in this section on general t e rms ,
t h e s pr e ad a n d m a t u r i ty data are ave rage s for all borrowe r s
( s e e T a b l e s 13 and 1 5 ) ;
LI BOR i s the quarterl y average o f
d a i l y ra t e s of 6 month $ L I B O R (source: OECD).
·
18
Se e Se c t i on V, pp 4S
to 48,
for more d e t ail e d i n forma t i o n .
21
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Th i s e co n omi c b a c k g r o u nd p r o v i d e d a d u a l s t i mu l u s t o b a nk s '
i n t e r n a t io n a l a c t i v i t i e s .
F i r s t , t h e s h o r t ag e o f d o me s t i c c r e d i t
d e ma nd e n c o u r ag e d c o mme r c i a l b a nk s t o s e e k pr o f i t ab l e l e nd i �g
oppo r t u n i t i e s o u t s i d e t he i r d ome s t i c m a r k e t s ;
t h e s e t h e y f o u n d , a nd
t h ey we r e a b l e t o i n c r e a s e t h e s h a r e - a nd d iv e r s i ty - o f
t
i n t e r n a t i o n a l a s s e t s i n t h e i r por t f o l i o s , b o t h b e c a u s e a g r ow i n g
n u mbe r o f s o v e r e i g n bor rowe r s we r e e n t e r i ng t h e m a r k e t a n d be c a u s e
the e co n o m i c po l i c i e s p u r s ue d i n m a ny d e v e l op i ng co u n t r i e s e n c o u r a g e d
f o r e i g n bor row i n g by t h e i r re s i d e n t s .
I n c r e a s i ng l y , d e v e l op i n g
co u n t r i e s ' e f fo r t s t o r e co n s t i t u t e t h e i r d e p l e t e d re se rve s we re a
f u r t h e r i mpo r t a n t s o u r c e o f d e m a n d .
B a nk s ' a p pe t i t e s we re whe t t ed
f u r t h e r by t h e s pe ed w i t h wh i ch s ome d e b t o r s imp rove d t h e i r b a l a n c e
o f p a y me n t s a n d r e s e rve s po s i t i o n s d u r i ng 1 9 7 7 a n d 1 9 7 8 .
rh
3
Se con d ,
t he r a p i d g r ow t h o f l i q u i d i ty i n t h e m a r k e t - p a r t i c u l a r l y i n 1 9 7 7
a nd 1 9 7 8 - m a d e i t e a s y t o f un d s u c h l e nd i n g a t c o mp e t i t iv e r a t e s ;
i nd e ed ,
i t i s t emp t i ng to c o n c l u d e t h a t t he r ap i d g r ow t h i n l en d i n g
w a s s u ppl y d r i v e n i n t h e s e y e a r s .
s,
47
Al t h o u g h t h e r e w a s s ub s t a n t i a l d e ma nd f o r n e w f u nd s , v e r y few o f
t h o s e w i s h i ng t o bo r row c o u l d b e r e g a r d e d a s g ood r i s k s .
Th u s , w i t h
b a n k s s e ek i ng t o i n c r e a s e t he i r i n t e r n a t i o n a l l e n d i n g , t h e r e w a s
22
i n t e n s e compe t i t i o n i n i t i al l y f o r th e l i m i t e d n umbe r o f qu al i t y
a s s e t s av a i l a b l e and t h e n f o r o t h e r a s s e t s .
Th i s eme r g e d f i r s t i n
i mp r ov e d t e r m s f o r OECD bo r row e r s ( e sp ec i a l l y t h e s p r e ad s t h e y c o u l
o b t a i n , wh i ch f e l l s h a rpl y t h roug h 1 9 7 6 a nd 1 9 7 7 ) a nd l a te r i n mo r e
w i d e s pr e a d r e d uc t io n s i n co s t and m a r k e d l e ng t h e n i ng o f ma t u r i t i e s .
T h e b r o ad e f f e c t o f t h i s compe t i t i o n w a s t o produce g e n e r a l l y
f a v o u r ab l e t e rm s :
b y t h e e nd o f 1 9 7 8 , s pr e ad s we r e a s l ow - a n d
m a t ur i t i e s a s l on g - a s i n t h e pe r io d immed i a t e l y pr e ce d i n g t h e 1 9 7
c r i s es .
W i t h t h e e a s i e r c ond i t i on s , b o r r owe r s we r e a l so r e f i n a n c i
p r e v i ous l y co n t r a c t e d d e b t :
t h e pe n a l t i e s for p r e p a yme n t , wh i ch h a
b e e n n e g o t i a te d wh e n a n out r i g h t "bo r r owe r s ' m a rk e t " w a s n ot
f o r e s e e n , d i d n o t p r e s e n t a n ob s t a c l e to t h i s p r o ce s s ( wh i ch h a s
r e ce n t l y a g a i n b e come r e l a t i v e l y common ) .
Int• �••t
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Th e d i f fe r e n c e s i n t h e t i m i ng o f t he improveme n t i n cond i t i on s
a r e mo s t ev i d e n t i n t h e av e r ag e s pr e a d s f ac i n g b o r rowe r s :
av e r a ge
m a t ur i t i e s s howe d l i t t l e s y s t e m a t i c v a r i a t i o n be twe e n a r e a s d u r i ng
As t h e ch a r t s h ow s , a s h a rp d i f f e r e n t i a t i o n em e r g e d
t h i s pe r i od .
d u r i n g 1 9 7 6 b e twe e n t h e spr e a d s t y p i c al l y ob t a i n ab l e by OECD b o r r ow
a n d t ho s e o f f e r ed t o d e v e l op i n g coun t r i e s - wh i c h r em a i n e d b r o a d l y
23
in
�1
re
::. .
u n c h a ng ed u n t i l th e s econd ha l f o f 1 9 7 7 .
By comp a r i s on w i t h t h e
ear l y 1 9 8 0 s , howev er , wh en t h er e wa s a per s i s t en t d i v erg en c e of t e r m s
f a c ed b y d i f fe r ent g r o u ps o f b or rower s , t h i s d i f f e r en t at i o n w a s
l es s en ed by t h e s u b s eq u en t r ap i d r ed u c t i o n i n spr ead s f a c ed by
d ev el op i ng cou n t r i es and a mou n t ed t o o n l y abo u t 1 /4 % po i n t by
en d- 1 9 7 8 .
97
:i
ha
49
Wh i l e cond i t io n s d u r i ng t h i s per iod ma y b e ch a r a c t er i s ed apt l y a s
co n s t i t u t i ng a " bo r r ower s ' ma r k et " , t h er e w a s a l s o t h e beg i n n i n g o f
s o me p r u d en t i a l co n cer n o v e r t h e so u n d n es s o f th e f i n a n c i a l po s i t i o n
o f s o me d eb t o r n a t i o n s a n d over ba nk s '
w i t h c o u n t ry r i sk ;
a b i l i t i es t o a s s es s a n d cope
l ow s p r ead s , t o o , were ag a i n r a i s i n g q u e s t i o n s
a s t o w h et h e r b a nk s were ob t a i n i n g a r et u r n a d eq u a t e to b u i l d u p
s u f f i c i en t r es erves ag a i n s t t h e po t en t i al r i s k s t hey f ac ed .
Th es e
conc er n s , h owev er , d o no t appea r t o h av e h ad any n o t i ceab l e ef f ec t s
on t h e v o l u me o f b u s i n es s o r o n g en era l ma r k et co nd i t i o n s .
1 979-1 981 :
50
t h e s econd o i l s h ock a n d s o me ear l y c a s u a l t i es
Wh i l e t he s y n d i c a t ed c r ed i t s ma r k et w a s n ot d i r ec t l y u n d er s t r a i n
d u r i n g t h e year s 1 9 7 9 t o 1 9 8 1 , t he a t t end a n t eco nomi c and po l i t i c a l
c l i ma t e b ec ame i n c r ea s i ng ly u n f a vo u r ab l e to r ap i d i n c r ea s es i n
l end i ng , t h o u g h b a n k s i n th e ma j o r i n d u s t r i a l co u n t r i es s t i l l w i s h ed
to ex p a nd t h e i r i n t er n a t i o n a l bu s i n es s - p a r t i c u l a r l y a s co rpo r a t e
d ema nd fo r d o mes t i c c r ed i t r ema i n ed w eak - a nd fo u nd n o s h o r t a g e o f
d ema nd f o r i n t er n a t i on a l l o a n s .
Fo r emo s t a mo n g s t t h e eco n omi c
f ac t o r s a f f ec t i ng l end i n g w e r e t ho s e s t em mi ng f r om o i l ma r k et
d ev el op men t s , w i t h t h e d o u b l i n g o f o i l p r i c e s d u r i ng 1 9 7 9 a n d
i n to 1 9 8 0 .
Wh i l e t h i s h a d t h e i m med i a t e ef f ec t o f sh a r p l y
i n c r ea s i ng t h e l ev el o f bo r row i n g by o i l - i mp o r t i ng co u n t r i es t o
f i n a n c e t h e i r a c t u a l and p r o s p ec t i v e c u r r en t a c co u n t d e f i c i t s ,
it at
t h e s ame t i m e b r oug h t ab ou t a s t r o n g po l i cy r es po n s e i n t h e d ev el op ed
c o u n t r i es .
e
g
d
y
Th i s wa s i n f l u en ced mu c h mo r e s t r o n g l y t h a n i n 1 9 7 3 /7 4
by a pr eoc c u p a t i o n w i t h t h e c on t a i n men t o f i n f l a t i o n a ry p r es s u r es ,
a n d w a s ev i d en ced i n ma ny c o u n t r i es by t i g h t m o n et a ry po l i c i es .
By
1 9 8 1 t he wo r l d ec o nomy w a s mov i ng r ap i d l y i n to s h a rp reces s i o n ;
a nd
n o n - o i l co mmod i ty p r i ces ,
i mpo r t a n t t o may l d cs , b eg a n t o f a l l .
C o mpo u nd i n g t h e o i l s h o ck a n d t h es e con s eq u en t d ev el opmen t s wer e
pol i t i c a l uph e a v a l s i n I r an f r om 1 9 7 9 a nd i n Po l a nd f r om l a te
1 9 8 0 , wh i ch for ced u pon b a n k e r s t h e r e a l i s a t ion t h a t sov e r e i g n
l e nd i n g wa s n o t a l w a y s f r e e o f s i g n i f i c a n t r i s k s ;
a nd d eb t
d i f f i cul t i e s i n muc h o f t h e E a s t b l oc - t ho u g h mo s t not abl y i n
Po l a n d .
Th e U S a ut ho r i t i e s ' e f fo r t s i n 1 97 9 t o f r e e z e al l I r an i
a s se t s d e n om i n a te d i n US d o l l a r s wa s a s i g n i f i c a nt s ho ck to the
m a r k e t s , wh i ch h ad for l ong d i s r ega rded the po s s i b i l i t y of t h i s
o f a c t i on .
51
I n con j un c t i o n w i t h t h e s e eve n t s , b an k s ' pe r ce pt i o n s of r i sk
wh i ch h ad pe r h ap s be e n ov e rmuc h i n f l u e nc ed by t h e r e l a t i v e l y g ood
l o a n- l o s s e x pe r i e n c e o f pr ev i o u s ye a r s - we r e beg i nn ing to c h a ng e
As a con s e q ue n ce , b a n k s bec ame h e s i t a n t t o i n c r e a s e the i r e x po s u r
ce r t a i n a r e a s , p a r t i cul a r l y t o t ho s e cou n t r i e s pe rce i v e d t o h ave
vul n e r ab l e e x t e r n a l po s i t i o n s .
Sma l l e r b a nk s - for mos t of wh om
s y n d i c a t ed l e nd i n g h a s pe r h a p s a l w a y s been a fr i ng e ac t i v i t y
-
b
to avo id i nv o l v eme n t i n new l o a n s to t he se cou n t r i e s a nd th e bro
s h a r i n g out of s yn d i c a t ed l oa n pa r t i c i p a t ions became i n c r e as i ng l y
d i f f i cul t , l e ad i ng i n some i n s t an ce s to the empl oyme nt o f d i f fe r
l e nd i n g t e c h n i q u e s a nd t h e d ev e l opme n t , for i ns t ance, o f • c l ub
l oa n s • - w he r e by s m a l l g r oups o f l a rg e b a nk s t ook u p a n e n t i re 1
t hem s e l ve s .
bus i n e s s :
Rmo u n t e
lltna
T h i s beg a n to be r e f l ec t ed i n t he l ev e l s o f new
not o n l y d i d t he r a t e of i nc r e a se i n � ew l e nd i ng d ur i
�arket
ra f e e d
Pe r
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i n c r e a s i n � p r opo r t i o n t e nd ed to be r a i s ed by p r i�e c u s t o� e r s , � a i n l y
OECD b o r r owe r s .
Th i s t r e nd con t i n u ed i n t o 1 9 8 1 , t h o u g h t h e f i g u r e s
f o r t h e l a t t e r pa r t o f t h e ye a r a r e - pe r h a ps a r t i f i c i a l l y - i n f l a t e d
by t h e $ 3 5 b n com� i t t ed i n s t a nd by l o a n s a s s o c i a t e d w i t h o i l
com pany t a k e ov e r a c t i v i t y i n t h e US a t t h e t i me .
n
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52
At abou t t h i s t i m e , t h e r e w a s a l s o g r ow i n g o f f i c i a l co n c e r n ov e r
b a n k s ' e x po s u r e t o i n t e r n a t i o n a l r i s k s .
Th i s wa s
ex empl i f i e d b y
t h e J a p a ne se a u t h o r i t i e s ' a c t i o n i n v i r t u a l l y h a l t i n g ( f ro� Oc t o b e r
1 9 7 9 ) t he pa r t i c i pa t ion i n synd i c a ted l o a n s o f Japane se b a nk s and
sk
t h e i r fo re i g n b r a n c h e s ;
a nd ot h e r G 1 0 cou n t r i e s a l s o co n s id e r e d
od
w a y s o f i n t r od u c i n g g r e a t e r c a u t i o n i n to b a n k s '
ur
rr. a r � i n s o n wh i c h l o a n s t o ma ny c o u n t r i e s we r e be i n � e x t e n d e d d i d not
ge
T h e r e wa s ,
po l i c i e s .
i n t e r n a t ional l e nd i ng
i n s ho r t , a g r ow i ng be l i e f t h a t t h e lo we r
now a d e a u a t e l y r e f l e c t t h e r i s k s .
53
O n e re s u l t o f t h i s ca u t i o u s a tm o s p h e r e w a s a f r ag � e n t a t i o n o f t h e
� a r k e t . P r i m e c u s to m e r s we r e a c t i v e l y so u g h t , w i t h ma j o r O E C D
bor rowe r s i n p a r t i c u l a r a b l e t o bo r r ow a t s p r e ad s co n s i s t e n t l y l owe r
ly
t h a n fo r a ny p r ev i ou s pe r iod a nd a t s l i g h t l y l o ng e r ma t u r i t i es .
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s o me cou l d o n l y g a i n a c c e s s to
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s h o r t e r ma t u r i t i e s a n d f r orr
mi d - 1 9 8 0 s pr e ad s - fo r N I C s
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I
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9
h i g h e s t a n d l owe s t s p r e ad s �
19
Th i s i s c ove r ed i n mo re d e t a i l
in Sect ion
V,
pp 4 6 t o 4 8 .
26
54
Th i s pe r i o d , t h e n, s a w t h e end o f t h e g e n e r a l bor rowe r s ' m a r k
o f 1 977/78 ;
b u t t h e r e wa s l i t t l e ev i d e n ce o f a ge n e r a l t i g h t e n i n g
i n cond i t i o n s , w i t h s pr e ad s f o r bor rowe r s i n ag g r eg a t e r ema i n i ng
co n s t a nt a nd l i t t l e ov e r a l l t e n d e n cy f o r l o a n s t o be a r r a n g e d a t
s ho r t e r ma t ur i t i e s .
R a t h e r , t h e r e wa s a g r ow i n g d i verge n c e be t w e
t h e bor r ow i n g cond i t i o n s f a ced by pr ime name s ( u s u a l l y in i nd u s t r i
.
coun t r i e s ) a nd l es s- f avoured cus tome r s ( i n no n- o i l d e v e l op i ng
c oun t r i e s ) .
Al s o, wh e n ma rk e t cond i t io n s s e emed to be wor s e n i ng
p a r t i c ul a r l y t h r oug h t he f i r s t n i n e mont h s o f 1 980 a nd i n t h e se
h a l f o f 1 98 1
-
t h i s wa s r e f l e c t ed a t a n a g g r eg a t e l ev e l i n s ho r t er
m a t ur i t i es r a t he r t h an i n h i g h e r s pr e ad s .
55
A t a d i s ag g r e g a t ed l ev e l , t he r e a r e some i nt e r es t i ng co n t r as
i n m a rk e t cond i t i o n s .
Th e ch a r t s be l ow s how t he amoun t s r a i s ed
ave r a g e spr e ad pa i d by E a s t b l o c and L a t in Ame r i c a n coun t r i e s ove
t h i s pe r io d , a l t houg h t he y c a n no t m a k e c l e a r t he e x pe r i e n ce o f t h
i n d i v i d ua l coun t r i e s .
E a s t b l o c bor rowe r s a l l f a ced f a i r l y s t ab
s p r e ad s t h r oug h ou t , a n d a t l ev e l s s ub s t an t i a l ly l es s t h a n t he
ave r a g e t h e y pa id i n th e pr e ce d i ng t h re e -y e a r pe r io d , u p to t h e
po i n t a t wh i c h e a c h i n t u r n w i t hd r e w f r om t h e m a r k e t - t he o n l y
e x c ep t io n be i ng Po l a nd , wh o se f i n al bor r ow i ng ( i n 1 980 03 ) w a s a t
s pr e ad o f 1
1 /2% ,
s o m e 5/8 % po i n t h i g h e r t h a n i t s p r e v i o u s n o rm ,
l i e s beh i n d t h e s h a rp pe ak i n t h e ch a r t .
By c o nt r a s t , L � t i n
f r om t
Ame r i c a n bo r r owe r s we r e a b l e t o r a i s e i n c re a s i ng amou nt s :
s e cond h a l f o f 1 980, t h o ug h , s e ve r a l - no t ab l y Br a z i l - need ed to
co n c ed e much i n c r e a s ed spr e ad s , Br a z i l ' s r i s i n g f r om a r o u n d 1 % f
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e f fo r t t o s u s t a i n i n f l ow s f r o m t h e b a nk s .
i n a d el i b er a t e
Th i s i s not f u l ly
ev i d en t in th e c h a r t bec a u s e some i mpo r t a n t bor r owe r s - e s pec i a l l y
Me x i c o a n d Ve n e z u el a - we r e s t i l l bo r row i n g a t l ow s p r e ad s .
Th e s e
l a t t e r co u n t r i e s ' o i l we a l t h wa s d o u b t l e s s a con t r i bu t o ry f a c to r to
t h i s d i f fe r ence .
1 98 2- 1 984 :
56
d e b t c r i s i s a nd i t s a f t e r ma t h
Th e pr e s s u r e s c r ea t ed by t h e s e c o nd o i l s h o ck a n d t h e s u b s e q u e n t
wo r l d r e ce s s i o n c a me to a he ad f o r ma ny cou n t r i e s i n 1 9 8 2 .
Deve l op i ng cou n t r i e s ' p r o s pec t s h ad b e e n s e t b ac k by s l ower wo r l d
e co n o mi c g r ow t h fo l l ow i n g t h e o i l p r i c e i n c r e a s e s i n 1 9 7 9 /8 0 and t h e
s ub s e q u e n t c o n ce n t r a t i o n i n t he i nd u s t r i a l i s e d n a t i o n s o n a n t i
i n fl a t io n a ry po l i c i e s .
Th i s m a d e u n s u s t a i n ab l e t h e d e v el opmen t pl an s
t hey h ad mad e a n d t h e s u c c e s s of wh i c h wa s c r u c i a l to b a nk s '
Mo r e
w i l l i n g n e s s t o con t i n u e t o i nc r e a s e t h e i r e x po s u r e s t o t he m .
p a r t i c u l a r l y , t h e co s t o f s e r v i c i n g d e b t - m u c h mo r e o f wh i ch w a s
n ow a t f l o a t i ng r a t e s - h ad r i s e n s h a r pl y a s t he a l t e re d s t a n ce and
t ech n i q u e o f US mo ne t a ry po l i c y i n l a t e 1 9 7 9 r a i s ed d o l l a r i n t e r e s t
r a t e s t o l ev e l s no t s e e n fo r ma ny ye a r s .
t
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s u b s t a n t i al n e t b o r r ow i n g w a s n e e d ed s i mp l y t o cove r i n t e r es t
se r v i c e o n e x i s t i n g d e b t s , a t a t i me wh e n t h e s ud d e n l y al t e r ed
p r o spec t s fo r g r ow t h d i s co u r a g e d am b i t io u s pl a n s a n d ma d e b a nk s
t
0
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r el u c t a n t to l e n d s u f f i c i e n t t o p r o v i d e t h e a n t i c i pa t e d n e t re so u r c e
i n f l ow s .
57
Ma r k e t co n f i d en ce h ad b e e n s h a k e n by t h e wo r s e n i ng e conomi c and
po l i t i c a l cond i t io n s i n Po l an d f r o m 1 9 8 0 / 8 1 a nd d i f f i c u l t i e s i n a
n u mbe r o f o t h e r C ME A c o u n t r i e s .
I t w a s f ur t he r a f f e c t e d by t h e
e me r g e n ce o f d e b t s e r v i c i n g d i f f i cu l t i e s i n L a t i n A me r i c a .
Th e
f i r s t i nd i c a t i o n o f p r o b l e ms c a me i n A r g e n t i n a , wh i c h by e a r l y 1 9 8 2
w a s al r e a d y i n d i f f i cu l t i e s .
Th e S o u t h A t l a n t i c c r i s i s i n Ap r i l
1 9 8 2 a nd t h e a s s o c i a t e d f r e e z e o f A r g e n t i n e a s s e t s by t h e UK
a u t h o r i t i e s ( w i t h a re c i p r o c a l f r e e z e of U K a s s e t s by A r g en t i n a )
appe a r s t o h a v e a f f e c t e d i t s d e b t - s e rv i c i ng c ap a c i ty - a nd per c ep t i o n s
o f i t - f u r t he r , d e s p i t e A r g e n t i n a ' s e x p r e s s ed w i l l i ng n e s s t o ho nou r
i t s f i n a n c i a l o b l i g a t i on s .
Th i s f i r s t s i g n o f pr o b l e ms en cou r ag ed
b a nk s t o l o ok mo r e c l o s e l y a t o t h e r o f t he m a j o r bo r r owe r s i n t he
r e g i o n , w i t h t h e ma i n e f f e c t t h a t o t h e r L a t i n A me r i c a n co u n t r i e s
f o u n d ac c e s s t o i n t e r n a t i o n a l b a n k c r ed i t s m o r e d i f f i cu l t a nd
28
e x pe n s i v e - e v i d e n ce o f wh a t t he B l S c a l l s t h e • r eg i o n a l i s a t ion
s y n d r ome "
58
(BIS 1 983a , p 1 26 ) .
A f u r t he r b l ow to m a r k e t co n f i d e n ce ( a nd o n e wh i ch e f f e c t i v e l
m a r k s t he beg i n n i n g o f t he d eb t c r i s i s ) wa s t he s u d d e n a n d un e x pe
s u s pe n s i o n of e x t e r n a l d e bt s e r v i c i n g by Me x i co i n the l a t e s u m me
o f 1 9 8 2 - p r e c i p i t a t ed by a m a s s i v e f l i g h t of Me x i c a n c a p i t a l to
US , a g a i n s t a b a ck g r o u nd of a we a k e n i ng o i l ma r k e t .
Th e cr i s i s
pa r t l y a t t r i b u t ab l e t o Me x i co ' s re co u r s e ove r t h e pr e ce d i n g y e a r
two to sho r t- t e r m f i n a n c e ,
i n o rd e r t o avo i d t h e mo r e o n e r o u s t e r
wh i ch wo u l d h a ve bee n n e c e s s a ry t o obt a in l o n g e r- t e rm b a nk l o a n s
( t he me a n ave r ag e ma t u r i t y o f i t s b o r r ow i n g s h a d f a l l e n f r om a pe
o f 5 . 9 y e a r s i n 1 9 7 9 t o on l y 2 . 5 y e a r s by 1 9 8 2 ) a nd t h e e ro s i o n o
b a nk e r s ' c on f i d en ce i n t he Me x i c a n a u t ho r i t i e s ' a b i l i ty a nd
w i l l i ng n e s s t o ad j u s t t h e i r pl a n s i n t he l i g h t o f e c onom i c
Bo r r ow i n g s ub s e q u e n t l y b e c ame mo r e d i f f i cu l t for
d e v e l opme n t s .
n u m b e r of he av i l y i n d e b t e d co u n t r i e s a ro u n d the wo r l d ;
pa r t icul a
i n La t i n Ame r i c a , wh e r e s eve r al ma j o r d e bto r s h ad , l i k e Me x i co ,
to r e l y i n c r e a s i ng l y o n s ho r t e r- t e rm bo rr ow i n g and h ad e x t r eme l y
l a rg e g r o s s f i n a n c i n g n e ed s .
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v i v i d l y i l l u s t r a t ed i n t he c h a r t oppos i te :
t h e q ua r te r ly l ev e l of
20
s y n d i c a t ed l e n d i ng f e l l d r am a t i c a l l y a f t e r t he
w s po n t a neou s w
f i r s t h a l f o f 1 9 8 2 a nd con t i n u e d a t a ve ry s u b d u e d r a t e t h r o u g h o u t
el
1 9 8 3 a nd 1 9 8 4 .
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ec
bo r rowe r s d i d n o t c h a ng e s i g n i f i c a n t l y , i t i s no t i ce a b l e t h a t bo t h
e
La t i n Am e r i c a n a nd E a s t e r n E u rope a n bor rowe r s v i r t u a l l y d i s a p pe a r e d
f r om t h e m a r k e t a s t ak e r s of w s po n t a n eo u s " c r ed i t s , t h oug h t h e l a t t e r
h ave r e t u r n ed t o th e m a r k e t d u r i ng 1 9 8 4 .
r
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60
w u ns po n t a n eou s w l e nd i ng to t h os e d e b to r s i nv o l v e d i n r e s ch e d u l i ng s
p r e s e n t s pa r t i c u l a r p r o b l ems .
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s a me k i n d a s n o rm a l m a rk e t l oa n s , b e c au s e t he d e a l s ar e no t s y n d i c a t ed
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m a rk e t ;
i t i s u s ed t o d i s t i ng u i sh s u c h l o a n s f r om t ho s e fo rm i ng
p a r t o f t h e f i n a n c i ng p a ck ag e s fo r t r o u b l ed d eb t o r s i n wh i c h f u n d s
h av e b e e n p r ov i d ed - l a rg e l y o n a pro r a t a b as i s - by e x i s t i ng
l e nd e r s .
21
Be c a u se bot h r e sc h ed u l i n g s a n d " n e w m o n ey w p a c k a g e s r e s u l t i n
g r o s s n e w l e nd i ng ( t h o u g h o n l y t h e l a t t e r i n n e t n e w l e n d i n g ) ,
bo t h a r e r e l e v a n t a nd so a r e i d e n t i f i e d s e p a r a t e l y f r om no rm a l
Fu l l d e t a i l s o f t h e
ma rke t l e nd i ng i n t h e c h a r t oppos i te .
amou n t s i n vo l v e d a r e pr e se n t ed i n t ab l es 3 A a nd 3 B ;
t hey a r e n o t
i n c l ud ed in a ny o f t h e o t h e r t a b l e s o r ch a r t s i n t h i s pa p e r ,
no r a r e t h e t e rm s o f t h e d e a l s i n c l ud e d i n t he c a l c u l a t i o n
o f a ve r ag e s con t a i n ed i n t a b l e s 1 3 , 1 5 a n d 1 6 .
Re sc h ed u l i n g s a r e
p u t o n t o a b a s i s r o ug h l y comp a r ab l e w i t h t h e no rm a l d a t a by
a l l oc a t i n g t h e am o u n t s a s f a r a s po s s i b l e t o t h e q u a r t e r s in w h i c h
w n ew
t he pos t po n ed amo r t i s a t i o n payme n t s wo u l d h a v e f a l l e n ;
mon ey w p a ck ag e s c a n be t r e a t ed in the n o rm a l w a y .
30
61
T h e e f f e c t o f t h e s e d i f f i c u l t i e s o n g e n e r a l ma rke t cond i t i o n
appe a r s to h a ve b e e n o n l y sho r t - l i v e d , w i th t h e i n c r e a s e i n av e r
s p r e a d s i n t h e l a t t e r pa r t o f 1 9 8 2 r e v e r s e d i n t h e f i r s t hal f of
1 9 8 3 a n d no c l e a r e v i d e n ce of sh o r te r me an f i n a l m a t ur i t i e s .
U n d e r l y i n g t h e p a t t e r n o f l o a n vo l ume s , s pr e ad s and m a t u r i t i e s
d u r i ng t h i s pe r iod , howe ve r ,
i s a n i n c r e a s i ng t e nd e n cy fo r t he
s y n d i c a t ed l oa n s m a rk e t to become a sou r c e o f f u nd s o n l y for
f a v o u r ed bor rowe r s .
mo r
Th i s i s we l l i l l u s t r a t ed by t h e r e l a t i v e
s t ab i l i t y f r om t h e s t a r t o f 1 9 8 2 o f bo t h av e r ag e spr e ad s and
me an
f i n a l ma t u r i t i e s f o r t ho se bor r owe r s s t i l l h a v i ng a c c e s s to t h e
ma rk e t .
T h e r e i s e v e n some i nd i c a t i o n t h a t , f r om m i d - 1 9 8 3 ,
c o nd i t i o n s we r e b eg i n n i ng t o i mp r ove s l i g h t l y fo r s u c h bo r r owe r s ,
w i t h s p r e ad s f a l l i n g a n d m a t ur i t i e s l e ng t h e n i ng .
62
T h e d e c l i n e i n t h e vol ume o f n e w c r ed i t s a l s o re f l e c t s t h e
i n c r e a s i ng r e c ep t i v e n e s s o f l o ng e r- t e rm c ap i t a l ma rke t s t o bo r ro
f r om t h e m a i n i nd u s t r i a l cou n t r i e s .
Th i s i s e v i d e nc ed by i n c r e
f o r e i g n a nd e u r o bo nd i s sue s and by t h e g r ow i n g popul a r i ty o f f l o a
22
r a t e no t e s
- ma ny o f wh i ch a r e he l d by b a nk s - wh i c h m ay be s e e
a s i n c r e a s i ng l y compe t i ng w i t h t he syn d i c a t ed l oa n ma rk e t .
Th is
s e c u r i t i s a t i o n o f e u r om a rk e t a c t i v i ty i s t o u c h e d on ag a i n in S e c t '
VI ,
f o r i t i s a d e v e l opme n t wh i ch r a i se s impo r t a n t q u e s t io n s abou t
f u t u r e o f t h e synd i c a t ed c r ed i t s m a r ke t .
22
S e e R am s d e n ( 1 9 8 4 )
3
1
V
FEATUR E S OF THE M A RKE T
63
T h e p r e v i o u s s e c t i o n g a v e a br oad ove rv i ew o f de v e l o pme n t s i n t h e
sy n d i c a te d c r ed i t s m a r k e t fr om 1 9 6 8 t o 1 9 8 4 a nd t h e e c o nom i c
b a ck g rou n d ag a i n s t wh i ch t h ey s h o u l d be s e t .
Th i s s e c t ion p r e se n t s
fu r t he r s t a t i s t i c a l
i l l u s t r a t i ng a s pe c t s of
i n fo rm a t i o n on t h e ma rk e t ,
beh av i ou r in i t a nd s h ow i n g i n m o r e de t a i l t h e i nfo rma t i o n w h i c h m a y
be drawn o u t of t h e b a s i c da t a .
tn
I t l ook s fi r s t a t m e a s u r e s o f
a c t i v i t y i n t he m a r ke t , a t t h e s t r u c t u r e o f t h e m a rk e t i n t e r m s o f
l o a n s i z e , a t t h e s t o ck of s y n d i c a t ed c r ed i t s o u t s ta nd i ng a n d a t t h e
g r owt h of sy n d i c a te d l e nd i n g comp a r ed w i t h t h a t o f b a nk l e nd i n g a s
;
,
�e a s u r ed by t h e B I S ;
i t n e x t p r e se n t s i nfo rma t i o n o n t h e i n v o l ve � e n t
o f d i ffe r e n t n a t io n a l i t i e s o f b a n k a s s y n d i c a t e m a n a g e r s , a n d f i n a l ly
di s c u s s e s v a r io u s a s pe c t s of l o a n te rms and t h e s e v e r a l p i t f a l l s to b e
avo ided i n t he i r i n t e rp r e t a t i o n .
64
T h e da t a wh i c h l i e b eh i n d t h e c h a r t s i n t h i s s e c t i on a re
g e n e r a l l y t o be fo u n d i n t h e t a b l e s ;
w h e r e t h i s i s n o t t h e c a s e , t he y
are as fa r a s po s s i b l e co n s i s t e n t w i t h t h em .
.s
:t '
)Ut
T h e s c a l e a n d s t r u c t u r e of m a r k e t ac t i v i t y
(a)
Le v e l s o f m a rk e t a c t i v i t y
65
T h e p r e ce d i n g di s c u s s i o n of t he dev e l op�e n t of t h e s yn d i c a t ed
c r edi t s m a r ke t h a s con c e n t r a t ed so l e l y o n t he g r os s l e ve l s of
bo r r ow i n g ,
i n n om i n a l do l l a r t e rm s .
Wh i l e t h i s i s c l e a r l y a n
impo r t a n t m a g n i t u de i n t h e con t e x t of f i n a n c i ng n e eds ( a n add i t i o n a l
m e a s u r e r e l ev a n t i n t h i s co n t e x t
r epayme n t s , wh i ch
i s t h e l ev e l o f bo r r ow i n g n e t of
i s d i s c u s s ed b e l ow ) ,
i t i s not a pa r t i c u l a r l y
u s ef u l me a s u r e of m a rk e t a c t i v i t y b e c a u s e of t h e i nf l u e n c e o n i t of
ch anc e s i n pr i c e s .
66
T h e c h o i c e of a p p r op r i a t e �e a s u r e fo r m a r k e t a c t i v i t y i s by n o
�e a n s s t r a ig h t fo rwa r d .
O n e obv i ou s c a n d i d a t e i s a bo r r ow i n g s e r i e s
fr om wh i ch t h e e ffec t s o f p r i ce c h a ng e s h a v e be e n r emov e d ,
e x p r e s s e d i n con s t a n t p r i c e s .
i e on e
T h i s t h e n r a i s e s t he f a r f r om t r i v i a l
i s s u e of t h e c h o i ce of p r i c e d e fl a t o r :
s h ou l d i t b e e x po r t o r impo r t
pr i c e s , a dome s t i c p r i c e s e r i e s o r some o t h e r ?
S h o u l d t h e p r i ce s be
32
c y c l i c a l l y ad j u s te d or n o t ?
S h o u l d so�e c o�po s i t e i nd e x be
u se d ?
Anot h e r po s s i b i l i ty i s s i m p l y t o l ook a t the n u mbe r o f d e a l s , wh i c
m i g h t b e t h o u g h t t o b e un a f f e c t ed by pr i ce c h a ng e s ( b u t th e r e
is
e v i d e n ce - pr e s e n t ed l a t e r - t h a t t h i s h a s n ot i n f a c t bee n t h e
c a se ) .
A l e s s o bv i o u s me a s u r e , b u t one wh tch m i g h t be impo r t a n t ,
wou l d be the n u � be r o f s er a r a t e p a r t i c i p a t i o n s or th e numbe r of
b a nk s i n v o l v e d i n s y nd i ca t i o n .
67
The ch a r t bel ow i l l u s t r a t e s two o f t h e s e po s s i b i l i t i e s :
t he
o f g r os s new b o r row i n g e x pr e s sed i n 1 9 8 0 d o l l a r pr i ce s ( t h e d e f l a
u s ed i s th e I M F ' s se r i e s f o r wo rl d e x po r t pr i c e s ) ;
o f l o a n s a n n o u n ced �
a nd t h e numbe
I t i s im�ed i a t e l y e v i d e n t tha t t h e s e two
me a s u r e s d o no t te l l t he s ame s t o ry t h ro u g ho u t t h e pe r i od :
the
1 9 7 3 /4 s u r o e i s m u c h l e s s p r o n o u n ced wh e n me a s ur ed i n t e rms of
n u mbe r of l o a n s , a n d t h e s u b s e o u e n t i n c r e a s e i n act i v i t y m u c h
s t r ong l y t r e nd ed .
mer
T h e m a rk ed d i v e rg e n c e be twe e n t h e two me a s ure
i n the pe r io d 1 9 7 8 t o 1 9 8 0 i s pa r t i c u l a r l y not i c e ab l e end i s of
c ou r s e r e f l e c t ed in s i m i l a rl y ma rk e d ch ang e s i n t he ave r ag e s i ze
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( 1 9 83 ) .
33
t h i s po i n t i s d i s c u s s ed s ho r t l y .
O n bot h me a s u r e s , tho u g h ,
a�
l o a ns ;
l'
t he l e v e l o f a c t i v i ty s i n c e 1 9 8 2 i s a s s ub d u e d a s i n t h e po s t - 1 9 7 4
s l um p .
t,
e
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e
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68
An a s pe c t o f t h e s y n d i c a t ed c r e d i t s m a rke t wh i ch h a s so f a r onl y
be e n me n t i on ed i n p a s s i n g i s i t s s t r u c t u r e i n t e r ms of the
d i s t r i b u t io n o f l o a n s i z e s .
I t w a s n o t e d i n S e c t i on I I t h a t
pu b l i c i sed l o a n s h ave r a n g e d i n s i z e f r om a s l i t t l e a s $ 1 mn to mo re
t h a n $ 5 b n , b u t t h a t mos t l o a n s fe l l be twe e n $ 1 0 m n a n d $ 2 0 0 mn .
Thoug h t he s i z e s o f l o a n s a r e no t pe r h a p s o f v i t a l i mpo r t a n c e i n
u nd e r s t a nd i n g a nd a n a l y s i ng th e m a rk e t , a n d t h e r e a r e d o u b t l e s s m a ny
sm a l l l o a n s wh i c h a r e ( b e c a u se o f t he i r s i z e ) u n p u b l i c i s ed , t he l o a n
r
e
s i z e d i s t r i b u t i on fo r p ub l i c i s ed d e a l s a nd ch a ng e s i n i t ov e r t ime a r e
n e v e r t h e l e s s o f s ome i n t e re s t :
fo r e x ampl e , t h e a v e r ag e s i z e o f l o a n
ha s s hown some m a r k ed f l u c t u a t i o n s - a s t h e ch a r t oppo s i t e i mpl i e s .
69
An i mpo r t a n t po i n t to n o t e a t t h e o u t s e t i s t h a t t h e l o a n s i z e
d i s t r i b u t i o n i s v e ry s ke we d :
fo r i n s t a n ce , t he i n t e rq u ar t i l e r a ng e -
t h a t i > , t h e r an g e wh e n o n e q u a r t e r o f t h e l oa n s h a v e b e e n d i s c a r d e d
f r om e a c h e n d o f t h e d i s t r i b u t i o n - i s t yp i c al l y tw i ce a s l a r g e a s t he
med i a n l oa n s i z e a nd t h e l a r g e s t l o a ns r eg u l a r l y e x c e e d te n t im e s t h e
s i z e of the a ve r ag e l oa n .
Th i s s k e w n e s s m ak e s i t d i f f i c u l t to f i n d
s i mpl e me a s u r e s wh i ch r e l i ab l y i n d i c a t e t h e s h ape o f t h e d i s t r i b u t i o n
a nd ch a n g e s i n i t ;
f o r e x ampl e , v e ry l a r g e l o a n s , t h o u g h i n f r eq ue n t ,
can have a s u b s t ant i al
imp a c t o n t h e a v e r a g e a nd s o d i s to r t t h i s
s t a t i s t i c a s a me a s u r e o f v a r i a t i o n s ove r t ime i n t he g e n e r a l s h ape of
t he d i s t r i b u t i o n .
Wh e n e x am i n i n g a pe r i od as l on g a s 1 9 7 2 to 1 9 8 4 ,
d u r i ng w h i c h pr i c e s i n c r e a se d t h re e f o l d ,
i t i s a l s o impo r t a n t to
i s ol a t e r e a l c h a ng e s in t h e s i z e of l o a n s f r om t h os e wh i ch me r e l y
r e f l e c t i n c r e a se s i n p r i c e s .
Fo r t h i s r e a s o n , t h e d a t a e x am i ned
f i r s t h a v e a g a i n bee n d e f l a t ed by t h e d o l l a r pr i ce i nd e x o f wor l d
e x po r t s .
70
T h e s t a t i s t i c s pr e se n t ed i n t he ch a r t s ove r l e a f prov i d e a
n u mb e r o f me a s ur e s o f t h e sh ape o f t he l o a n s i z e d i s t r i b u t i o n .
F i r s t , two me a s u r e s o f a ve r ag e l o a n s i z e :
t h e me a n a nd t h e med i a n ;
n e x t , two me a s u r e s o f t h e r a n g e o f l o a n s i z e s , c h o se n to i d e n t i fy
34
t he
o f th e
co r e
market
a na t h e
range ,
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i nt e rae c i l e
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r a n ge , b u t w i t h onl y 1 0 % o f t h e
.
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s i m i l a r t o the
d i s c � ra ea f r om e a ch
l oa n s
il
e x t r e�e ;
me a s u r e
t o wh i ch t he d i s t r i b u t i o n d i v e rg e s f r om eo ual i t y o f
. ...:1 2 4
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.
l o an e t z e - s s a e p r t c e a
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i n t e rc u a r t i l e
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f i n a l ly ,
e x t ent
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T a k i n � t h e me a s u r e s o f � v e r a� e a na r a n g e f i r s t , t h e ye a r s c
c a n be d i v i d ed i n t o t h r e e pe r i od s : ·
1 9 7 2 t o 1 9 7 5 , d u r i ng wh i ch
me a s u r e s r o s e s h a r pl y t o a pe ak t owa rd s t he e nd o f 1 9 7 3 a nd
b a ck a b r u pt l y t o t he i r i n i t i a l l e ve l s :
1 9 7 5 t o 1 9 7 8 , wh i ch
i n c r e a s e o f t h e s i z e o f t h e �e a s u r e s ( � a i n l y i n 1 9 7 5 ) ;
a nd
onwa r d s , wh e n a v e r a� e l o a n s i z e a n d ra ng e o f l o a n s i z e d e c l i n ed t
l e v e l s a s l ow o r l owe r t h a n t h o s e se e n i n 1 9 7 5 - m u c h o f t h e a e c l
t a k i n � p l a c e b e t we e n 1 9 7 8 a n a 1 9 8 0 .
Th e d am pe n i ng e f f e c t o f
the
d i f f i c u l t i e s i s v e r y ev i d e n t a nd , wh i l e some re c ove ry i n a v e r a � e
s i ze and ran�e
of
s i z e d i d t a k e p l a c e , t he ve ry h i g h v a l u e s re a c h
t h e bu oy a n t c o n d i t i o n s o f 1 9 7 3 h a ve n o t b e e n a ch i eved ag a i n .
Th
i s e v i d e n ce o f r e l a t i v e l y g r e a te r s t a b i l i ty o f t h e m e a s u r e s o f
2 4 T h e co n s t r u c t i on o f t h e G i n i coe f f i c i e n t a nd i t s l i � i t a t i o n s a
me a s u r e o f i n eo u a l i ty a r e d i s c u s s ed i n , f o r e x ampl e , S e n ( 1 97 3
f r om t h e l a t e 1 9 7 0 s onw a r d s , wh e n t he m a r k e t h a d r e a ch e d ma t u r i t y , b u t
l
n o s im i l a r p a t te r n i s e v i d e n t i n t h e m e a s u r e s o f ave r a g e l o a n s i z e .
Re ce n t ev e n t s h a v e r ed uc ed t h e s i z e s o f d e a l s i n n om i n a l as we l l a s
r e a l t e rm s .
t
Th e r e i s l i t t l e s i g n o f s i m i l a r v a r i a t i on i n t h e G i n i c o e f f i c i e n t
72
I n d e ed , ap a r t f r om t h e pe ak i n 1 9 8 1 0 3 ( a r e s u l t , a s i s t h e
co r r e s po nd i n g pe ak i n m e a n l o a n s i z e f o r t h a t q u a r t e r , o f t h e o i l
" j umb o s " a n no u n c e d t h e n ) , t h e r e i s n o obv i o u s s y s tema t i c va r i a t i o n
Some t h i ng o f t h e 1 9 7 2 t o 1 9 7 5 cy c l e i s e v i d e n t ,
f r om 1 9 7 6 o n wa rd s .
a s i s t h e imp a c t o f t h e i n c r e a s e i n r a ng e a n d a v e r ag e s i z e o f l o a n s i n
t h e r e c ov e r y pe r i od f o l l ow i ng t h e 1 9 7 4 c r i s i s ;
b eyo n d t h a t , t h e
co e f f i c i e n t h a s n o c l e a r t r e nd .
Th e G i n i c o e f f i c i e n t c a n n o t , u n f o r t u n a t e l y , d i s t i ng u i s h b e t w e e n a
73
w i d e v a r i e t y o f s o u r c e s o f i n eq u a l i t y ;
a n d t h e r e i s n o d i r e c t l i nk
be twe e n i t and t h e o th e r me a s u r e s s o f a r d i s c u s se d .
Nev e r th e l e s s ,
some i n te r e s t i n g f e a t ur e s o f t h e m a rk e t c a n be h i g h l i g h t ed by
compa r i so n o f t he me a s u re s .
S u c h comp a r i so n s u g g e s t s t h a t , d u r i n g
t h e i n i t i a l " l o a n r _ � e " c yc l e , t h e i nc r e a s e i n a v e r ag e s i z e a n d
range o f s i ze was
c
. e f l e c t i on o f a n upw a rd e x t e n s i on o f t h e l o a n
s i z e d i s t r i b u t i on r a t h e r t h a n a u n i fo rm i n c r e a s e i n l o a n s i z e s a t
a l l l e v e l s o f s i z e - f o r t h e l a t t e r wo u l d h av e h ad n o e f f e c t on t h e
G i n i co e f f i c i e n t .
S im i l a r l y , t h e l a ck o f r ed u c t i on i n i n e q u a l i t y
d u r i ng t h e 1 9 7 8 t o 1 9 8 0
Lo an S t z e a
pe r i od s u g g e s t s t h a t t he
m a rk e t wa s b e i ng a f fec t e d
..... .
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u n i fo rm l y - l o a n s of a l l
s i z e s we r e be i ng s c a l e d
N I nUt D.. I 1 e
d own ,
74
i n r e a l t e rm s .
Mo s t i n t e r e s t i n g ,
howe v e r ,
i s t h a t a l l t he
me a s u r e s o f me an an d r a n g e
we r e l i t t l e c h a ng ed i n
n om i n a l t e rm s be twe e n 1 9 7 8
a nd t h e f i r s t h a l f o f 1 9 8 2 ;
a nd , a s j u s t n o t e d , t h e G i n i
co e f f i c i e n t w a s a l so s t a b l e
, L=r I
I
1 177
I
I I I
I
I I I
1 17 1
I ''ll D I L1
� 1111
F' l re \
D. . t 1 e
'·
ov e r t h i s pe r i o d .
Th i s
36
al l
o f de a l s fr
pr i c e s ov e r t h e pe r i od .
Wh i l e
po i n t s t o s ome s t a nd a rd i s a t ion of t he
1 978 ,
de s p i t e
ma y
th i s
j ust
t he S O \
increase in
refl ect
a reduc t ion - at
i n c r e a se s - i n bo r r owe r s '
rea l
a s c r i be i t t o s ome f o r m o f
t h e s i s c a n be
f o und
t ha n sm a l l ,
money
o f t he
f i rs t
de c il e and q u art ile,
t r e n d i n t he v a l u e s o f
un t il
then
is no
st o ck
of
bu t
The
75
Two f urt her indic a t o rs
of
a s is evident
1 982 ,
me a s u r e s .
These,
bec ause
of
l ending
of
is,
t a k in g ac c o unt
The l at t er is mo st
t im i n g
o u t se t ,
a no t e o f ca ut ion.
is no t
e a sy
k n o wn ,
so
by
ex ist ing
c r ed i ts )
U n l i ke bo nd issues,
where
t h e pre
indeed,
whet her
t h e u se and repa y ment
be
th
or
of the
t he pa rt ici pa t ing banks i s usu a l ly known onl y t
invo lved in the deal.
the
l ending ,
It
is therefo re necessa ry,
t o est ima t e the l evel of
info rmat io n ava il able at
repa
the t ime each lo an is
G race pe riod and f in al
mat urit y will
be
is possib l e - once one has det ermined the drawdo wn da
a n d the freq uen cy of
am ort isa t ion pa y ments -
re pa y ment sche� u l e fo r ea ch l o an.
25
the st ock of
Wh ile t he announc ement and complet ion
nego t iat ed.
it
t
l evel of syndic a t ed
al rea dy have been - o r ,
deriving a series f or net
o r iginally
in t he chart ,
syndicated lendi ng
repa y ments of
s igning o f dea ls are we l l pub l icised ,
o n the basis o f
a ma rk e
t o disc o ve r when syndicat ed l oans are t o
were ever dra wn down.
t ho se direc t l y
1 978 -
va l u
co u po n p a y ments and redempt ions are kno wn a t
repa id o r whet her t hey
f u nd s c o mm i t t ed
there is l i t t l
convenien t l y d e a l t wi t h f irst .
a n d amo unt of
it
t
t he me t ho ds used in t he i r
and the net
F irst,
25
are co nvenient l y desc ribed t o ge t her:
(that
fo r
not
t h e scale of syndicated lending a r e
of
syndic at ed . credi ts o u t st anding ;
76
1 972 ,
- unt il abo u t
syndic a t ed credit s and net
(c)
c a l cu l at ion,
is d i f f i c u l t
it
va ri a t io n in the nomina l
va riat ion in t he se
p a rt ic u l ar in t erest .
o f pr i
t he t h ird q u art ile and n int h dec ile .
t he l a t t er part
s i g n i f i ca n t
t ha t
q u art il es t hemselves ( r a t h e
apart f rom
ra ndom,
to
Furt her support
i l l u s ion .
i n t he d e c i l e s and
apparent l y
a rat e eq u a l
f inanc ing needs,
t h an t h e d i f f e r e nce be twe e n t hem ) :
other
nom ina l size
to d erive a hy po t het i
T hese can be added to get her to
The n in t h dec il e of the l o an siz e d ist r ibut ion is pa r t i cu l a r l y
susc ept ibl e t o rando m f l u ct ua t ions - o f as much a s $50 mn bec au se of the bunching of am ounts aro und mul t i ples of $50 mn
t he range a t wh i c h t h is dec il e ty pica l l y fal ls.
T a king t h i s
int o ac co un t , i t sho wed no sign if ic ant vari at io n in nom ina l te
f ro m t he end of
1 977
unt il the second half o f
1 982 .
37
g i v e a se r i e s f o r r epayme nt s o f a l l l o a n s i nc l ud e d i n t h e
a n n o u n ceme n t s s e r i e s , e n a b l i ng t h e c a l c u l a t i o n o f f i g u r e s fo r n e t
l e nd i n g .
th
er
tl
77
T a b l e s 7 t o 9 p r e s e n t e s t i ma t e s b a sed o n · the B a nk o f E n g l and
a n n o u n c eme n t s s e r i e s .
Th e e s t ima t ed d r awd own d a t a i n t ab l e 7
a s s ume d r awd ow n o n e mo n t h a f t e r compl e t i on o r - i f no comp l e t i o n d a t e
i s kn own - f o u r mo n t h s a f t e r a n n o u n ceme n t .
The imp l i e d synd i c at i o n
t ime fo r t h e s e l o a n s i s t h e r e fo r e t h r e e mo n t h s , somewh a t l o ng e r t h a n
t h e ave r ag e f o r t h o s e fo r wh i ch t h i s s t a t i s t ic i s k n ow n ( s e e t ab l e 6 ) :
i t i s a r e as o n ab l e pr e s ump t i o n t h a t ab s e n ce o f k n ow n compl e t i on d a t e s
i s l i k e l y t o be a s s o c i a t e d w i t h d e a l s wh i c h p r ove d i f f i cu l t t o
synd i c a t e .
T a b l e 8 s h ow s t h e re p ayme n t s c a l c u l a t ed o n t h e ba s i s o f
t h e d r awd own e s t i m a t e s i n t a b l e 7 ( amo r t i s a t i o n i s a s s umed t o o c c u r i n
e q u a l amo u n t s a t s i x - mo n t h l y i n t e rv a l s d u r i ng t h e r ep ayme n t pe r i o d )
e
r
a nd t ab l e 9 t h e r e s u l t a n t s e r i e s f o r n e t s y n d i c a t e d l e nd i ng .
78
An e s t im a t e o f t h e s t o ck o f syn d i c a t ed c r e d i t s o u t s t an d i n g c a n be
c a l c u l a t e d f r om t h e i n f o rm a t i o n in t a b l e 9 s imp l y by c u m u l a t i ng th e
S)
f i g u r e s f o r n e t l e nd i ng ;
t he r e s u l t s a r e s h own i n t ab l e 1 0 .
It
s h o u l d be n o t ed t h a t t h e s P f i g u r e s a re b a s e d o n l y o n l o a n s a n n o u n ced
s i n c e t he s t a r t of 1 9 7 2 , a n d so w i l l u n d e r s t a t e t he t ru e s to ck - b u t
b y i n c r e a s i ng l y sm a l l amo u n t s - j u s t a s t h e f i g u r e s f o r n e t l e nd i ng
wi l l o ve r s t a t e t he a c t u a l amo u n t t o t he e x t e n t o f t h e re payme n t s o f
p r e- 1 9 7 2 c r ed i t s .
B u t the amo u n t s i nv o l v e d a r e , o n a n y r e a so n ab l e
e s t im a t e o f t h e l ev e l s o f bo r row i n g b e f o r e 1 9 7 2 , sm a l l a n d c a n fo r
6
p r a c t i c a l p u r po s e s be ig n o r e d bey o n d t h e m i d - 1 9 7 0 s
�
79
A l s o om i t t e d a r e t h e r e ce n t r e s c he d u l i ng s a nd
' n ew m o n ey ' l o a n s .
The n ew mo n e y l o an s a r e , o f co u r s e , n e t a d d i t io n s t o t h e ov e r a l l s t o ck
o f s y n d i c a t ed l e n d i ng a nd h av e ye t t o r e a c h t h e i r r e payme n t pe r i o d s ,
so t h e y c a n be a d d ed i n a s t hey s t an d .
T h e r e s c h e d u l i n g s , o n t he
o t h e r h a nd , d o n o t r e s u l t i n any n e t n ew l e nd i ng b u t s i mp l y po s t p on e
t he r e payme n t o f e x i s t i ng l o a n s .
N e v e r t h e l e s s , t h ey too n e ed t o b e
a dded i n to o b t a i n a me a s u r e o f the t o t a l s to ck of s y n d i c a t ed c r ed i t s
o u t s t a n d i ng :
26
t o t he e x t e n t t h a t i t i s e x i s t i ng , r e c o r d e d c r ed i t s
Th i s f a c t o r i s a l l owed f o r i n t h e n e x t s e c t i on , wh e r e a mo r e
pr e c i s e e s t ima t e o f t h e l e v e l o f t h e ag g r e g a t e s to ck i n t h e y e a r s
1 9 7 3 t o 1 9 7 6 i s o f some i mpo r t a n ce .
38
wh i ch we r e r e s c h e d u l e d , t he e s t i ma t e s i n t ab l e 1 0 r e f l e c t t h e i r
r e pa yme nt - wh i c h d i d n o t ac t u a l l y o c c u r ;
a nd t o t h e e x t e n t t h a t
i s u n p ub l i c i sed c r ed i t s o r l e nd i n g not i n synd i c a t e d form wh i ch
r e s c h e d u l e d , i t h a s b e c ome bot h pu b l i c i se d and • sy n d i c a te d " t h r o
I f a l l t h e s e resc h ed u l i n g s a n d new m o
l o a n s ar e ad d ed , t h e s to ck o f ou t s t a nd i ng sy n d i c a t ed c r ed i t s may
t h e r e s c h e d u l i ng p r o c e s s .
amou n t to some $ 4 0 0 b n , o f wh i c h a l i t t l e l e s s t h a n $ 2 5 bn rep r e
7
o i l j umbos f r om 1 9 8 1
�
80
Th e d a t a o n ag g r eg a t e n e t f l ow s s hown i n t ab l e 9 d o n ot ad d
s i g n i f i c a n t l y t o t he i n f o rma t i o n al r e ad y pr e se n t ed above on ma rke
a ct iv i t y :
a s th e ch a r t i n t he n e x t s e c t i on con f i rm s , t h e r e we re
c l e a r s u r g e s of ac t i v i t y in t h e e a r l y 1 9 7 0 s , t he l a t e 1 9 7 0 s and
e a r l y 1 9 8 0 s e v e n wh e n r e payme n t s ar e t ak e n i n t o a c cou n t .
mo r e i n t e r e s t i n g , howe v e r ,
Rather
i s t he d i s a g g r e g a t ed p i ct u r e , p a r t i cu
w h e n i t i s l ook e d a t i n r e a l te rm s ( d e fl a t i ng , a s b e f o r e , by wo r
e x po r t p r i c e s ) .
Th i s shows , f o r e x ampl e , t h a t - apa r t f rom some
n e t i n c r e a se s in 1 9 7 8 - the r e a l s to ck o f c r ed i t s o u t s t a nd i ng to
b o r rowe r s i n t h e m a j o r OECD c ou n t r i e s wa s f al l i n g f o r mos t of th
pe r i od 1 9 7 5 to 1 9 8 0 ;
a nd t h a t t he o i l e x p o r t e r s h av e i n t e rm i t te
b e e n m a k i n g ne t repayme n t s i n r e a l t e rm s s i n c e 1 9 7 4 .
Al s o o f
i n t e r e s t i s t h e e x pe r i e n ce o f t h e g r oup i n g s wh o s e memb e r s h av e
e n co u n t e r ed d i f f i cu l t i e s i n s e r v i c i n g t h e i r Cl e b t s .
I n' nom i n al
t e r m s , f o r i n s t an ce , n e t b o r r ow i ng by e a s t b l o c co un t r i e s ce a sed
1 98 1 ;
i n r e a l t e rm s , t h e r e wa s a no t i ce ab l e d e c l i n e i n the i r re
o u t s t a nd i n g sy n d i c a t ed bo r r ow i n g s i n 1 9 7 7 and 1 9 8 0 t o o , w i t h n e t
bo r r ow i n g ( 1 9 8 0 0 4 - 1 9 8 1 02 ) i n o n l y t h r e e q ua r te r s f r om t he f i r s
quarter of 1 980 to date .
Ne t b o·r row i n g by d ev e l op in g coun t r i e s
wa s , i n r e a l t e rm s , c l o s e t o a s t an d s t i l l f o r a t l e a s t two q u a r t
a round the end o f 1 9 7 9 and s t ar t of 1 9 80 .
B u t , g i ve n t h e n a t ur
t h e s e d a t a a nd t he w a y in wh i ch t h ey h a v e be e n cal cul a t ed ,
it i s
p r o b ab l y unw i se t o rel a te t he m t o o c l os e l y t o b al a n c e o f payme nt
d e v e l opme n t s at t h e t im e .
A f i n a l w o r d i s pe r h a p s c a l l e d f o r o n the g e n e r al r e l eva n ce
B e ca us
t h e s to ck d a t a t o o t h e r a s pe c t s o f e u r oma rk e t a c t i v i ty .
t h e n a t u r e o f a s y n d i c a te d c r ed i t , w i t h i t s r e g u l a r rol l ov e r s an
81
pe r i od i c ad j u s tm e n t o f i n t e r e s t r a te s , t h e s t o ck o f s y n d i c a t ed
27
By w a y o f c omp a r i son , O r i on B a nk ( 1 9 8 4 ) g i v e s a n e s t ima t e of
s to ck of i n t e r n a t i o n a l bo nd s o u t st a nd i ng a t e n d - 1 9 8 3 of abo u
$ 3 0 0 bn ;
t h i s h a s p r o b a b l y i n c r e a se d by ab ou t 1 5 % i n 1 9 84 .
39
c r ed i t s i s prob ab l y an impo r t a n t d e t e rm i n a n t o f t h e l ev e l of a c t i v i t y
i n the i n t e rnat ional
�t
i n t e r b a nk m a rke t , wh i c h i s i n e f f e c t the mo n e y
m a r ke t fo r i n t e r n a t i o n a l bu s i n e s s .
Howe v e r l ow t h e l e v e l of new
l e nd i n g a c t i v i t y f a l l s , t h e r e w i l l for some ye a r s be a s ub s t a n t i a l
v o l ume o f s y n d i c a t ed l e nd i ng wh i ch mu s t be f un d ed ;
a n d i t i s to
t h i s s t ock , r a t he r t h a n t he g r o s s n ew f l ow , t h a t we m i g h t e x p e c t t h e
y
es
l e ve l o f i n t e r b a nk a c t i v i t y to b e l i n k e d .
(d)
Comp a r i s o n o f t he g r ow t h of s y n d i c a t ed l e nd i n g w i t h t h a t o f B I S
d a t a o n n e t i n t e r n a t i o n a l b a nk l e nd i ng
82
To con c l u d e t h i s r e v i ew o f t h e sc a l e a nd s t r u c t u r e o f ma rk e t
a c t i v i ty ,
i t i s pe r h aps h e l p f u l to p u t i t i n t h e mo r e g e n e r a l
cont e x t o f b a nk s '
t o t a l l e nd i n g ac t i v i t y .
Sy n d i c a t e d l e nd i ng
r e p r e s e n t s o n l y o n e o f a v a r i e ty o f ch a n n e l s f o r i n t e r n a t i o n a l
b a nk i ng f l ow s , a n d i t s r e l a t i v e irr.po r t a n ce h a s und oub t ed l y v a r i ed
c o n s i d e r a b l y o v e r t h e l i f e o f t h e ma r ke t .
Th i s s e c t i o n a t te mp t s to
a s s e s s t h e s c a l e a nd t i m i ng of t h e s e ch a ng e s , b y c ompar i n g e s t i m a t e s
o f n e t s y n d i c a t ed l e nd i n g w i t h B I S d a t a o n i n t e r n a t i o n a l ba nk l e nd i ng .
83
Th e B I S d a t a on i n t e r n a t i o n a l b a nk l e nd i ng a r e comp i l e d f r om d a t a
s u bm i t t e d t o t h em by n a t i on a l a u t hn r i t i e s w i t h i n t he s o- c a l l ed
" r e po r t i ng a r e a " , wh i c h h a s e x p a nd e d ove r t he ye a r s a nd now i n c l ud e s
n o t o n l y t h e G 1 0 c o u n t r i e s b u t a l so some wh o se b an k s pl ay on l y a s m a l l
8
ro l e i n i n t e r n a t i o n al l e nd i n g
Th e s e d a t a c omp r i s e , i n e s s e n ce ,
�
t he s t o ck s o f a s s e t s a n d l i a b i l i t ie s o f b a nk s m a k i ng s t a t i s t i c a l
9
s u bm i s s io n s t o t he s e n a t i o n a l a u t ho r i t i e s
Th e B I S d a t a the r e f o r e
�
c a p t u r e ac t u a l l e nd i n g b y b a nk s i ri t h e r e po r t i ng a r e a , wh a t e ve r fo rm
i t t ake s ( s ub j e c t , o f co u r s e , to t he b a nk r e po r t i ng r eq u i r eme n t s wh i c h
u nd e r l i e t h e n a t i o n al sub m i s s io n s - w h i c h i n some c a s e s e x c l u d e
impo r t a n t
i t em s s u c h a s b a nk s ' po r t f o l i o i nv e s tme n t ) .
Th i s i s i n
s h a rp co n t r a s t to t he d a t a f r om t h e s y n d i c a t ed c r ed i t s m a r k e t ;
for ,
a s d i s c u s se d a bov e , t he l a t t e r do n o t r e l a t e d i r e c t l y to t h e u s e a nd
r e payme n t o f f u nd s .
Th e s t o ck d a t a , a n d n e t l e nd i ng d a t a , pr e s e n t ed
i n t h e p r e v i o u s s e c t i on a re e s t i m a t e s o f s yn d i c a t ed l e nd i ng , w h e r e a s
:e
t h e B I S d a t a a r e r e co rd ed l ev e l s o f a c t u a l l e nd i ng ,
i n m a n y fo r m s .
28
De t a i l s o f t he cove r ag e o f t h e B I S d a t a c a n be f o u n d i n B I S
( 1 9 8 4 ) , wh i ch a l s o not e s t he r e a s o n s fo r t h e va r i ou s b r e a k s i n
ser ies .
29
Th e I M F h a s r ec e n t l y a l s o b e g u n t o p u b l i s h d a t a o n b a n k l e n d i ng ;
t h e s e ar e mo r e compr e h e n s i ve i n t he i r cove r ag e t h a n t h o s e o f t h e
B I S , b u t n o t a v a i l a b l e fo r s u c h a n e x t e nd e d pe r i o d .
40
W i t h t h i s g e ne r a l c a v e a t i n m i n d , we c a n comp ar e t h e g r ow t h o f
t h e s to ck o f ou t s t and i ng s y n d i c a t e d l en d i ng as e s t ima t ed f r om the
84
B a nk ' s s t a t i s t i c s ( t ab l e 1 0 ) w i t h t h a t o f b a nk s ' tot a l l e nd i ng as
r ec o r d e d in the B I S s t a t i s t i c s .
Th e mos t f r eq u e n t l y u s ed of the
se v e r a l r e l ev a n t B I S s e r i e s is proba b l y t h e B I S s e r i e s for tot a l
i n t e r n a t i o n a l b a nk l e n d i ng 0
Al low a n ce i s made h e r e fo r b r e ak s
wh i ch a f f e c t t he d a t a ( t h e s e occur a t e n d -y e a r i n 1 9 7 7 , 1 9 7 8 a nd
�
ne
1 9 8 1 , a n d a t e nd -M a r ch 1 9 8 3 ) by r e sc a l i ng e a r l i e r d a t a to t h e new
l e v e l at t h e b r e ak ;
t h i s p r e se rve s c on s i s t e n t g r ow t h r a t e s a c r o s s
t he br e ak po i nt .
Th e B a nk se r i e s o n t h e s to ck of synd i c a t ed
c r ed i t s i s a l s o am e n de d , to al l ow fo r th e amo u n t s bo r rowed pr io r to
1 9 7 2 wh i ch a r e n o t i n c l ud ed in t h e B a nk s e r i e s .
Dr aw i ng on the
i n fo rm a t i o n pr e se n t e d on pag e 1 7 fo r the e a r l y ye a r s o f t h e m a rk e t ,
bor r ow i n g o f $ 1 . 5 b n , $ 4 b n , $ 6 b n a n d $ 5 b n i s a s s umed for the
ye a r s 1 9 6 8 t o 1 9 7 1 ;
s tock d a t a h av e be e n d e r ived by appl y i ng to
t he s e amo u n t s a r epayme n t s p r o f i l e s im i l ar to t ha t i mp l i ed by the
1 972 data .
Re ce n t r e s c he d u l i ng s a n d new money l o a n s , as i n d i ca t ed
t he 1 9 8 1 o i l j umbos a r e e x c l u ded ,
i n t ab l e 3 , a r e al s o i n c l u d e d ;
bec a u s e a l a r g e propo r t i on o f t h e s e l o a n s repr e s e n t e d dome s t i c
l e nd i ng by US b a nk s to US c orpo r a t i o n s - wh i c h wo u l d no t b e cap t ur
by t h e B I S f i g u r e s .
G r o wt h
R at e s
of
85
Le n d 1 n g
, . .. .... ,
- 11
.. -
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compa r e the g rowt h of the
w i t h the ove r a l l g r ow t h o f
·· -
il
o f t h e s e two s e r i e s to
syn d i c a ted c r ed i t s m a rk e t
71 -
I
Th e ch a r t make s us e
II
11 I I11 II 11
1 174
71
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1 11 4
b a nk s '
i nt e rn a t i o n a l l e nd i
a n d s h ows t he y e ar-on- y e ar
g row t h r a t e s of bot h t h e B
ne t s e r i e s a nd t h e
s y n d i c a t ed c r ed i t s
Th e B I S s e r i e s s t a r t s i n 1
04 , so t he c h a r t beg i n s in
1 9 7 4 04 ;
but i t st il l c
t u r e s the end o f
s u r g e i n e u r om a rke t - and ,
i n p a r t i cu l a r , synd i c a ted
I t s h ou l d be n o t e d t h a t ' ne t ' i s u s ed h e r e i n a s e n se d i f f e re n
f r om t h a t u se d e a r l i e r i n t h e cont e x t of syn d i c a t ed l e nd i ng ,
t h i s B I S s e r i e s n e t s ou t e s t i m a
i t me a n t ' ne t o f r e pa yme n t s ' :
d ou b l e - cou n t i ng r e s ul t i ng f r om t h e r e d e pos i t i ng o f f u n d s bet we
t h e r ep o r t i ng ba nk s t hems e l ve s .
41
::> f
l o a n - a c t iv i t y .
A l s o e v i d e n t i s t h e r a p i d r e l a t i v e g r ow t h o f
s y n d i c a t ed l e n d i ng i n t h e l a t e
1 9 7 0 s an d , a g a i n ,
in the early 1 9 80s
( e ve n w i t ho u t t he 1 9 8 1 Q 3 o i l j um b o s ) .
86
s
On e con c l u s i o n to be d r awn f r om t h e s e r e s ul t s , wh i ch i t i s
pe r h a p s wo r t h n o t i ng be f o r e mov i ng o n , r e l a t e s to t h e pos s i b l e v a l u e
o f d a t a on syn d i c a t ed c r ed i t s a s a l e ad i ng
ser ies .
i nd i c a t o r o f t h e B I S
B I S d a t a a r e pu b l i s h ed on l y a f t e r a c o n s i d e r ab l e d e l a y ,
u s u a l l y some f o u r mo n t h s , wh e r e a s s y n d i c a t ed c r e d i t s d a t a c a n be
t,
obt a i n ed immed i a te l y a n d - i f i t i s an a n no u n c eme n t s s e r i e s wh i ch
i s u s ed - some mo nt h s p r i o r t o t h e a c t u a l u s e o f f u n d s .
I t might
t he r e fo r e appe a r t o b e po s s i b l e t o a n t i c i p a t e t h e B I S d a t a by a s
m u c h a s t h r e e q u a r te r s i n t h i s way .
ed
Howe v e r , e v e n a l l ow i ng f o r t h e
i n e v i t a b l e imp r e c i s i o n o f t h e f ig u r e s wh i ch wo u l d be obt a i n ed
t h r o u g h t h e s y n d i c a t ed c r ed i t s r ou t e , t h e h i s to r i c a l d a t a i n d i c a t e
t h a t t h e d i v e rg e n c e be twe e n t h e g r ow t h r a t e s o f t h e two se r i e s i s
1r
t oo v a r i a b l e t o o f f e r a ny r e a s o n a b l e ch a nc e s o f s u c ce s s o f t h i s a s a
s h o r t - t e r m f o r e c a s t i n g t e ch n i q u e .
Th e r e c e n t t re n d t ow a r d s
s e c u r i t i s a t i o n o f i n t e r n a t i o n al l e n d i ng may we l l h av e i n c r e a s ed t h e
d i v e rg e n c e , t o t he e x t e n t t h a t s u c h l e n d i ng
i s c a p t u r ed t h e B I S
ser ie s .
B a nk s '
>f
87
i n vo l v em e n t a s m a n ag e r s o f s y n d i c a t ed c r e d i t s
An i mpo r t a n t a s p e c t o f t h e d e v e l opme n t o f t h e s y n d i c a t e d c r ed i t s
m a rk e t , b u t o n e wh i c h i s n o t o f t e n d i s c u s se d w i t h a ny pr e c i s io n
be c a u s e o f t h e l a ck o f h a rd d a t a on i t ,
i s t h e w a y i n w h i ch t h e
i nv o l v eme n t i n t he m a rk e t o f d i f fe r e n t n a t i o n al i t i e s o f b a nk h a s
evolved .
A c ommo n l y n o t ed fe a t u r e o f t he r ap i d e x p a n s i o n o f t h e
m a rk e t h a s b e e n t he s h i f t s ove r t i me i n t he n a t i o n a l i t i e s w h i c h h a ve
be e n pa r t i c u l a r l y a c t i v e .
I n d e e d , s ome comme n t a to r s on t he
e u r oma r k e t s g i v e s i g n i f i c a n t we i g h t i n t h e i r a n a l y s i s o f t h e g r ow t h o f
t h e m a r k e t a n d o f t h e compe t i t i v e p r e s s u r e s w i t h i n i t to t h e ch a ng i ng
pa t t e r n o f i n vo l veme n t · a n d ,
i n p a r t i c u l a r , t o t he t im i ng o f t h e e n t r y
o f n e w g r o u p s o f b a nk i n to t he m a r k e t 1
31
See ,
�
fo r e x ampl e , G ood m a n ( 1 9 8 0 ) a nd L l ewe l l yn ( 1 9 7 9 ) ,
( 1 984 ) .
42
88
I n t he c ont e x t o f e u rom a r k e t a c t i v i t y mo r e g e n e r a l l y ,
it i s
0
cou r s e pos s i b l e t o c omp i l e i n f o rm a t i o n o n i nv o l veme n t f rom B l S d at
t ho u g h i t m u s t be r e c og n i s ed t h a t t he s e d a t a r e l a t e t o t he l o ca t i
l e nd i ng b a nk s r a t he r t h a n to t he i r n a t i on a l i ty ( l oc a t i o n o f he ad
o f f i ce ) .
W h e n one con s i d e r s the mo r e l im i t �d a r e n a of the sy n d i c
c red i t s m a r k e t , t h e r e i s no o bv i o u s so u r c e o f i n f o rma t ion o n l e n d i
·a c t i v i t y :
eve n i f one cou l d f i nd o u t t h e n ame s o f a l l the b a nk s
p a r t i c i p a t ed i n e ac h l o a n - i t s e l f a n al mos t i mpos s i b l e t a sk - i t
r a re t o k n ow t h e e x t e n t o f t h e i r pa r t i c i pa t io n :
a nd t h e l ev e l of
o r i g i n a l p a r t i c i pa t io n may not be a g ood g u i d e t o t h e l ev e l o f
e xp o s u r e a t some s u b s e q u e n t d a t e .
89
N a r row i n g t h e fo c u s a l i t t l e , howe v e r , a n d c o n ce n t r at i n g on
l eve l s of i n v o l veme n t in the s y n d i c a t io n p r o c e s s i t se l f , t h e r e i s
Th e B a
mo r e r e a l i s t i c pos s i b i l i ty of f i nd i ng s o me re l e v a n t d a t a .
of E n g l a nd d a t a i n c l u d e r e co r d s of t h e m a n ag e rs o f a s ubs t an t i al
n umbe r o f l o a n s , t h i s i n f o rma t io n be i ng d e r ived bo t h f r om p u b l i c i s
i n i t i a l d e t a i l s o f l o a n s and f r om • t om b s tones • .
An a n a l y s i s o f
m a n a g e r s i s n o t , o f co u r s e , a n i n f a l l i b l e g u i d e t o a c t u al l e nd i ng ;
b u t i t s h o u l d p r ov i d e a me a s u r e o f t he e x t e n t t o w h i c h bank s a r e
e q u i ppe d to h an d l e s yn d i c a t i o n s a n d i s , by e x t e n s ion , a g u i d e to
c omm i tm e n t to c ro s s - bo rd e r l e nd i n g :
o n l y t h o s e ba nk s w i t h
a
lo n g
i n t e r e s t i n s u c h l e nd i ng w i l l h a v e t he e x pe r i e nc e and s t a t u s to t
o n m a n a g eme n t r ol e s .
I n add i t i o n , a n impor t a n t e l em e n t o f
comp e t i t i on i n t h e m a r k e t i s t h a t wh i c h t ak e s pl a ce betwe e n po t ent
l e ad ma n ag e r s s e e k i n g m a nd a t e s :
s o a n e x am i n a t i on o f p a t te r n s of
r e pr e s e n t a t i on a t l e ad ma n a g e r l ev e l m i g h t prov i d e i ns i g h t s i n t o
c ompe t i t iv e p r e s s u r e s a t t h e ve ry c o r e o f t h e s ynd i c at i o n pr oce s s .
90
Th e B a nk o f E n g l a n d i n fo rma t io n o n m a n ag e r s i s not comp l e te :
abou t 1 0 % o f ca s e s , n o m a n ag e r h a s b e e n r e c o r d e d .
i s fo r some l o a n s a s ub s t a n t i al m a n a g em e n t g r o u p :
Fu r the rmo r e ,
i n wh a t fol lows ,
l o a n h av e be e n a n a l y sed ,
Neve r th el e s s , e v e n wi
t h e r e i s s om e l os s o f r e l ev a n t i n f o rma t i on .
t he s e l im i t a t i o n s , a r e a s o n a b ly c ompr e h e n s i v e p i c t u r e can be bu il t
T a b l e 1 1 p r e se n t s d a t a f o r t h e f u l l pe r io d 1 9 7 2 - 1 9 8 4 b rok e n d own
b o r r owe r g r o u p and by n a t i on a l i ty o f m a n ag i ng b a n k ( n a t ion a l i t y be
o n l y t h e f i r s t t e n ma n a g e r s re co rd ed f o r
a
d e t e rm i n ed by t h e l oc a t i o n o f t h e h e a d o f f i c e o f e a c h b a nk i n v ol ve
0
43
E a ch appe a r a n c e o f a b a n k o f a pa r t i c u l ar n a t i o n a l i t y co u n t s a s a
" u n i t " of i n vol veme n t ;
t h e r e i s n o f u r t h e r we ig h t i n g , eg by s i z e of
The c h ar t ove r l e a f pl o t s t ime se r i e s o f f r eq u e n cy , e x p r e s s ed
l o an .
a s a pe r ce n t ag e o f k n own i n vol veme n t ,
f o r t ho s e e ig h t g r o u p s o f
b a nk s wh i ch i n a t l e a s t o n e y e a r ov e r t h e pe r i od e x c e e d 5 % o f t h e
to t a l .
Da t a on l e a d m a n ag e r s ( wh i ch a r e not p r e s e n t ed h e r e )
e x h ib i t a pa t t e r n c l o s e l y s i m i l a r to t h a t o f al l ma n ag e r s .
91
Be fo re l ook i n g i n d e t a i l a t t h e c h a ng i ng pa t te r n o f n a t i o n a l i t i e s
o f m a n ag e r ,
i t i s wo r t h no t i ng t h a t t he d a t a i n t ab l e 1 1 e x h i b i t a n
i n t e r es t i ng re l a t io n be twe e n t he n a t i o n a l i ty o f m a n ag e r s a nd t h e
;
n a t i o n a l i ty o f bo r r owe r s .
S c a n d i n a v i a n , a n d Au s t r a l i a n a nd N e w
3a
Z e a l and , b a n k s a r e a u i t e c l e a r l y d i sp ropo r t i o n a t e l y r ep r e s e n t e d i n
l o a n s yn d i c a t e s fo r m i no r O E C D b o r rowe r s , a n d Ar ab b a n k s i n d e a l s fo r
is
o i l export e r s .
Fo r t h e o t h e r n a t i o n a l i t i e s , p r ope r s t a t i s t i c a l
t e s t i n g i s n e e d e d t o u n cov e r s u c h r e l a t i on s h ip s ;
3;
wh e n c a r r i e d ou t ,
t h i s i n e ac h c a s e s t r o ng l y r e j e c t s t h e hypo t h e s i s t h a t n a t i o n a l i ty of
ma n a g e r a n d g r ou p i ng o f bo r rowe r are i nd epe n de n t .
In g e n e r a l t e rm s ,
Br i t i s h , F r e n ch a nd C a n ad i a n b a n k s h a v e d i s p r opo r t i o n a t e i n vo l v e m e n t
i n sy n d i c a t e s f o r ma j o r O ECD l o a n s b u t - e x c e p t fo r B r i t i s h b a n k s t
not f o r OECD l o a n s a s a who l e ;
G e r m a n b a n k s s how a m a r k e d pr e fe r e n ce
for E a s t b l o c a n d N I C s y n d i c a t e s , c o u n t e rb a l a n c ed by avo i d a n ce o f o i l
nt
e x po r t e r a nd l d c s y n d i c a t e s ;
f
ove r - r e pr e se n t ed i n N I C l oa n s .
s.
a nd con so r t i um b a nk s a r e p a r t i c u l a r l y
Th i s l im i t ed a n a l y s i s bo t h con f i rm s a
g e n e r a l t e nd e n cy fo r b a nk s t o b e i nv o l v e d i n s y n d i c a te s fo r b or row e r s
i n t h e i r own n a t i o n a l i ty g r o u p a n d s ug g e s t s t h a t t h i s g e n e r al t e nd e n cy
i s by n o me a n s un i v e r s a l .
I t i s pe r h ap s r a t h e r e as i e r to e xp l a i n t he
fo rme r ch a r a c t e r i s t i c ( d ome s t i c b a n k i ng re g u l a t io n s , b o r r owe r/b a n k
re l a t i o n s h i p s , l o c a l k n owl ed g e ) t h a n t he l a t te r .
92
Tu r n i ng now t o t he c h a ng i ng p a t t e r n o f i n vo l vem e n t , t he c h a r t
ove r l e a f immed i a t e l y c o n f i rms t he d om i n an ce o f US b a nk s a s m a n ag e r s ,
t h o u g h t he r e l a t i v e impo r t a n c e o f t he i r rol e d e c l i n ed ma r k e d l y i n
v ed
t he l a t te r h a l f o f t he 1 9 7 0 s a s o t h e r n a t i o n a l i t i e s b eg a n to e x p a nd
t h e i r i n t e rn a t io n a l a c t i v i t i e s .
Th e s te ad y r i s e s i n c e 1 9 7 9 c o u l d
r e f l ec t t h e m o v e b y U S r eg i o n al b a n k s i n t o sy n d i c a t ed l e n d i n g ;
this
w a s e n co u r ag e d by t h e i n c r e a s i n g a v a i l a b i l i ty o f u s p r i m e op t io n s i n
l o a n ag r e eme n t s , and by t h e
e f fo r t s o f e x i s t i ng m a n ag e r s
N a t t o n a 1 t t y o f • an a g • � • :
t o w i d e n th e con s t i t ue n cy of
f � e q u e n c y b � e a k d o wn
... ... . ,,
41
11
-
-
1- "'\
I
\
I
\
I
\
,"
\
,
,
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be c ame mo r e d i f f i c u l t .
\ ....
. .,.
,. .
\
-
s y n d i c a t ed l e nd i ng when
cond i t i o n s in t he m a r k e t
\
\
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11
41
l e n d e r s t o i n c l ud e ban k s no t
t r ad i t ion al l y i n vo l ved i n
.... ....
/
/
,,
I
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I
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-
11
93
Among s t t h e o t h e r g r o ups
b a nk s , t h e e x pe r i e n c e of t h r e
n a t i o n a l i t i e s i s pa r t i cu l ar l y
-
11
n o tewo r thy .
F i r s t , a n d mo s t
obv i o u s l y , J a p a n e s e b a n k s h a
e x pe r i e n ce d s h a r p sw i ng s i n
t h e i r r e l a t i ve impor t a n c e .
11
-
..
abr upt c u t b a ck i n 1 9 7 4 - not
r e v e r se d u n t i l 1 9 7 7 and 1 9 7 8
wa s d o ub t l e s s a con s e q u e n ce
t h e He r s t a t t col l apse a nd the
I
r e s u l t a n t t i e r i ng i n t he
i n t e rb ank m a rk e t , wh i ch i s
be l i ev e d to h ave a f f e c ted
J a p a n e se b a n k s p ar t i cu l a r l y
s e r io u s l y;
i nd e ed , t h e J a pan e s e b a nk s we r e whol l y ab s e n t f r om
s y n d i c a t e s a t m a n a g e m e n t l ev e l i n t h e s e c ond h al f o f 1 9 7 4 .
In 1 9
t h e J a p a n e s e M i n i s t r y o f F i n a n c e e a se d t h e i r t o u g h g u id e l i n e s on
·
i n t e r n a t i o n a l l e n d i n g by J a pa n e s e b a nk s;
b u t t h e i r r ap i d r e
e s t ab l i s hm e n t i n t h e m a rk e t pr omp t e d th e MoF to i n s t r u c t J a pa n e s e
b a nk s to w i t h d r aw t e mpo r a r i l y f rom t h e m a rk e t .
Th i s e n f o r c ed pa u
l a s t ed f r om O c t o b e r 1 9 7 9 to Apr i l 1 9 8 0 , a nd i s ag a i n r e f l e c t ed in
ob s e r ve d f r eq u e n cy of repr e s e nt a t io n .
94
S e c o nd , G e r m a n b a nk s ' r ep r e s e n t a t i o n h a s n ow r e t u r ned to a r ou
2 % , h a v i ng r i s e n a s h i g h a s 9 % i n th e l a t e 1 9 7 0 s .
Th e e xp a n s i on
t h e i r r o l e oc c u r r ed f a i r l y s t e ad i l y ove r t he 1 9 7 0 s , pe r h ap s a s s ist
by t h e s t r e ng t h of the OM a g a i n s t the d o l l a r w h i ch i n c r e a s ed the i r
ca pa c i ty f o r d o l l a r l e nd i ng ( s e e B I S ( 1 9 7 9 ) ) ;
f r om 1 9 8 0 , t h e de bt
d i f f i cu l t i e s i n t he E a s t bl oc - n ot a b l y Po l a n d - to wh i ch Ge rman
45
we r e r e l a t i v e l y h e av i l y e x po s e d , a nd d ome s t i c d i f f i c u l t i e s w i t h
f i x e d - r a t e l o a n s f u n d ed by i nc r e a s i ng l y e x p e n s i ve s h o r t - t e rm f i n a n ce ,
w e r e no d o u b t i mpo r t a n t i n t he i r d e c i s i on t o r ed u c e t h e i r i n vol v e me n t
a nd the i r r e p r e s e n t a t i o n a t m a n ag e r l e v e l h a s r em a i ne d s u b d ued .
95
Th i r d , t h e i n v o l v eme n t o f A r ab b a n k s h a s r i s e n s t r ong ly
th r o u g h o u t t he pe r i od cov e r ed - bu t w i t h s ome r e t r e n c hme n t i n 1 9 8 4 .
A ma s s i v e i n j e c t i o n o f ca p i t a l f o l l ow i n g t h e 1 9 7 9 o i l p r i c e i n c r e a s e
p r o v i d ed t h e b a s i s f o r t h e s u r g e i n a c t i v i t y ov e r t h e p a s t fo u r
y e a r s , a nd e n a b l ed t hem t o co n t i n u e t h e t r e nd s e t i n t he 1 9 7 0 s .
96
It is,
ba nk s .
f i n a l l y , wo r t h no t i ng t h e r o l e pl a y e d by con so r t i um
Th e i r i nv o l v eme n t h a s be e n d e c l i n i n g ove r t h e p a s t few
ye a r s , h av i ng b e e n i n t h e r eg i o n of 7 % f o r a c o n s i d e r ab l e pe r io d .
G i v e n t h e i r d i s pr opo r t i o n a t e r o l e i n l oa n s f o r N I C b o r r owe r s ( a n
i n d i c a t i o n , pe r h a p s , o f t h e p u rpo s e f o r w h i c h some o f t h e s e b a n k s
t
8
we re e s t ab l i s h e d ) , t h i s n o d o u b t r e f l e c t s t h e d i f f i c u l t i e s w h i c h
he
i n f r eq u e n cy w i t h wh i ch t h e y n ow c ome t o t he m a r k e t ;
m a ny o f t h e c o u n t r i e s i n t h a t g r o u p h a v e r e c e n t l y f ac e d a n d t h e
a nd pe r h ap s
a l s o t h a t c o n so r t i um b a nk s a r e t h e m s e l ve s n ow pl ay i n g a r a t h e r
d i f fe r e n t r o l e .
Te rm s a nd c o n d i t io n s i n t h e m a rk e t
9
97
Th i s s e c t i o n pr e se n t s some ad d i t io n a l d e t a i l on t h e p a t t e r n o f
s p r e a d s a nd ma t u r i t i e s ove r t h e pe r i od 1 9 7 2 t o 1 9 8 4 a nd i d e n t i f i e s
s ome po i n t s wh i c h m u s t b e b o r n e i n m i n d i n t h e i r u s e a nd
i n t e rp r e t a t io n .
IU
I t l ook s f i r s t a t t h e r a n g e a nd d i v e r s i ty o f
s pr e ad s an d m a t u r i t i e s , a n d a t t h e r e l a t i o n b e twe e n t h e two .
It
t h e n l ook s a t t h e no w r e l a t i v e l y c ommo n op t io n o f l o a n s pr i ce d ov e r
US p r ime r a t e a nd i t s impl i c a t i o n s .
F i n a l l y , i t d i s cu s se s t h e
impo r t a n t be a r i ng wh i c h f e e s a nd t ax a t i o n m a y h a v e o n s p r e ad s , a nd
t h e con s e q u e n t l i m i t a t i o n s w h i c h t h e s e f a c t o r s m a y p l a c e o n t h e u s e
o f s pr e ad s d a t a .
32
32
E a r l i e r B a n k o f E n g l a nd wo r k ad d r e s s i ng some o f t h e s e i s s u e s c a n
be f o u n d i n J o h n s t on ( 1 9 8 0 ) a n d F l em i n g a nd H ow s o n ( 1 9 8 0 ) , wh i c h
a l s o s e t s o u t some po s s i b l e t h eo r e t i c a l e x p l a n a t i o n s o f t h e
obse rved i n forma t i on o n m a rk e t cond i t io n s .
46
{a)
R a n g e a n d d i v e r s i ty o f spr e ad s a n d ma t u r i t i e s
98
Th e ag g r e g a t e s pr e ad s a nd ma t u r i t i e s i n f o rma t i o n pr e s e n t e d in
t ab l e s 1 2 to 1 6 a n d u s ed so f a r i n t h i s paper i s b a s ed o n de t a i l s f
I n t h e c a s e o f sp r e ad s ,
i nd i v i d u a l l oa n s , we i g h t ed by t h e i r s i z e .
a t t e n t i o n i s l i m i t ed to l o a n s pr i ce d ov e r L I BOR a nd - f o r h i g h e s t a
l owe s t s p r e ad - o f a t l e a s t 5 y e a r s ' m a t u r i t y a n d a t l e a s t $ 5 0 mn ;
f i x ed r a t e l oa n s , a nd c e r t a i n t a x - s pa r e d d e a l s , a r e ex c l ud e d .
Fo r
ma t ur i t i e s , n o s u c h r e s t r i c t i on s ar e appl i e d .
Th e c h a r t s be l ow s how d a t a f o r av e r ag e a nd e x t r em e s o f s p r e ad s ,
33
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a n d f o r h i g h e s t a n d me an f i n a l a n d ave r a g e
99
m a t ur i t y be i n g t h e t i me b y wh i ch - g i v e n r e payme n t s i n e q u a l
i n s t a l me n t s - h a l f t h e l o a n h a s b e e n r e p a id ) .
As c a n b e s e e n ,
s p r e ad s h a v e n e v e r e x c e e d e d 2 1 /2 % f o r p ub l i c i s ed l oa n s an d t h e
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p r i o r t o t h a t d a t e , g r a c e pe r io d s h av e n o t b e e n sy s t ema t i c a l l y
r e c o rd e d , s o t h e i n f o rm a t io n wo u l d b e u n r e l i ab l e .
47
h i g h e s t h a s g e n e r a l l y b e e n somewh at l e s s t h a n t h i s ;
e�ual ly , the
O f cou r s e , t h e r e
l owe s t h a s o n l y i n f r eq u e n t l y f a l l e n be l ow 1 / 4 % .
h a ve bee n l o a n s wh i ch h a ve a t t r a c t ed a h i g h e r s p r e ad t h a n t h i s , b u t
t h e s e de a l s h a v e no t be en p ub l i c i s ed .
T h e h i g h e s t p u b l i c i s ed s p r e a d
h a s u s u a l l y b e e n a t t r i b u t a b l e t o a La t i n A�e r i c an bor rowe r , t h e
t o a n O E CD b o r r owe r .
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2 0 years ,
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f a l l i n � to 1 0 y e a r s o r l e s s a t t i m e s o f m a r k e t s t r e s s ;
i t d o e s not
s e e� t o be pa r t i c u l a r l y a s so c i a t e d w i t h a ny one bo r r owe r or g r o u p o f
bo r r owe r s .
s
100
W h i l e t h e ma t u r i t i e s o f l o an s a r e eo u i v a l e n t wh e n v i e � e d
f r o� t h e po i n t o f v i ew o f b o r r owe r o r l e nde r , t he s ame c a n no t be
s a id o f sp r ea d s ,
f o r t ho u g h t h e s pr e ad me as u r e s a c c u r a t e l y t h e co s t
t o t h e bor rowe r ( s ub j e c t t o t h e c a v e a t s me n t i o n ed be l ow )
i t d oe s n ot
n e ce s s a r i l y r e f l e ct t he r e t u r n t o th e l e nd i ng b a nk s a nd s o m a y we l l
n o t b e a u se f u l i n d i c a t o r o f t h e i r l i k e l y b eh av i o u r .
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b a nk a t whom t h e l o a n i �
t a rg e t t ed ( a nd , w h i l e t h e
s pr e ad m a y a l s o i n c l u d e s o� e
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84
wh om r i sk w i l l be pe r c e i v e d
a s n eg l i g i b l e ;
this,
t he n , s h ou l d r e f l e c t o n l y
34
T h e r e m a y b e r e a so n s - s u c h a s t h e e x pe c t a t i on o f s e cu r i ng f u r t h e r
bu s i n e s s o r o f d eve l op i n� c u s tome r r e l a t i o n s h i p s - wh i c h m a y o n
o c c a s i o n l e ad a b a nk t o pa r t i c i p a t e i n a l o a n a t a l o s s , b u t t h a t
cou l d n o t be a s u s t a i n a b l e po s i t i o n i n t he l on g r u n .
48
t h e s e f u n d i n g co s t s .
Th i s s u g g e s t s t h a t l ook i ng a t sp r e ad s r e l
t o t he m i n i m u m may be u s e f u l wh e n a s se s s i n g ba nk s ' b e h a v i o u r .
s e r i e s a r e s hown i n t h e c h a r t , a n d pr e se n t a r a t h e r d i f fe r en t
p i c t u r e o f m a r k e t c o nd i t i o n s :
t h e ave r a g e s pr e ad i s a f a i r l y s t
m a r g i n ov e r t h e m i n i m um - c er t a i n l y , i t i s mo r e s t ab l e t h a n th e
a v e r a g e - a nd t he r a ng e b e twe e n m a x i m um and m i n imum h a s be e n m u c h
w i d e r i n t he l a s t few y e a r s t h an i n t h e e a r l y s t ag e s o f t h e m a r k
d ev e l opme n t .
Th i s m i g h t imp l y a g r e a t e r d e g r e e o f d i f fe r e n t i a t ·
i n t h e ma r k e t ( i n t h a t t h e r a ng e o f r e t u r n t o cov e r r i s k , r a t h e r
t h a n f un d i n g c o s t s , h a s r i s e n ) o r t h a t a w id e r r an g e o f . bo r ro we r s
c a n be a c commod a te d w i t h i n t h e appar e n t spr e ad ce i l i ng , t h e l owe r
t h e a c c ep t ab l e m i n i m um s pr e ad ;
b u t a d e t a i l ed d i s cu s s i o n o f th i s
beyo n d t h e s c ope o f t h e pr e se n t pape r .
(b)
S p r e a d s g r ad i e n t s :
ma t u r i t i es d a t a
c r o s s- s e c t i o n al r e s ul t s f r om s p r e ad s a nd
101
A l t h o u g h t he se t ime s e r i e s re s u l t s s ug g e s t a n i nv e r s e rel ati
b e twe e n spr e a d s a nd m a t ur i t i e s , t h i s n e e d not imp l y t h a t a n i n d i
b o r rowe r com i ng t o t he ' m a r k e t at a pa r t i cu l a r t im e wo u l d be able
r a i s e f un d s a t l ow e r s pr e ad s f o r l o ng e r m a t u r i t i e s :
this
c o n t empo r a n e o u s r e l a t io n s h i p be twe e n s p r e a d a n d ma t u r i ty i s q u i t€
s e p a r a t e f r om t h e way i n wh i ch sp r e ad a nd ma t ur i ty a r e r e l a ted
a p e r io d of t i me .
I t i s conv e n i e n t to c a l l t h i s r e l a t i on s h ip �
' s pr e ad s g r ad i e n t ' r a t h e r t h a n a ' y i el d c u r v e ' , wh i ch i t
r e s pe c t s r e s e m b l e s .
Be c a u se t h e b a s i c i n t e r e s t r a t e o n a syn d i
c r ed i t c h a ng e s i n l i n e w i t h m a rk e t r a te s a t e ac h ro l l ove r d a te ,
u s u a l c h a r a c t e r i s t i c s o f a y i e l d c u r ve - i n pa r t i cu l a r , t h e
of in terest r ate expect a t ions - wi l l be absent .
Wh i l e t h e
g r ad i e n t m a y n o t b e w h o l l y i n d e p e n d e n t o f i n t e r es t r a t e
- i f , fo r e x ampl e , t he s pr e ad b a n k s l ook fo r va r ie s w i t h t he l e v
i n t e r e s t r a t e s - t h e i r i n f l u e n ce w i l l be m u c h l e s s d i r ec t t h an
a y i e l d c u r ve , a nd i t a vo i d s con f u s i o n t o ad opt t h i s d i f f e r e n t
fo r i t .
1 02
M o r e i m po r t a n t t h a n i n t e r e s t r a t e s i n d e t er m i n i ng t h e
s p r e ad s g r ad i e n t w i l l b e b a nk s ' v i ews a s t o t he r i sk s t h ey a r e
If
r u n n i ng a nd t h e f i rm n e s s w i t h wh i c h t ho s e v i ew s a r e h e l d .
b an k s a re - a s i s g e n e r a l l y a s s umed - r i sk a v e r s e ,
o n t h e r i s k o f l e n d i ng t o a bo r rowe r a r e h e l d w i t h l e s s ce r t a i n ty
49
t h e l ong e r t he t ime ho r i z o n , t he n t h e y w i l l w a n t t h e s pr e ad to
compe n s a t e t h em n o t o n l y fo r the e x p e c t e d r i sk - wh i ch may , of
cour s e , be l owe r at m o r e d i s t a n t d a t e s t h a n i t i s now - bu t a l s o f o r
t h e a d d i t i o n a l u n ce r t a i n t y a t t a ch i ng t o t h e e x p e c t e d r e t u r n to l o a n s
o f l onge r ma t ur i t i es .
B a nk s m a y a l s o w a n t t o bu i l d i n t o t h e s p r e ad
o f l o n g e r- t er m l o a n s a n el eme n t to repl a c e t h e f e e i n c ome wh i c h t h e y
wou l d h av e e x p e c t e d to re ce i v e h ad t h e l oa n be e n o f s h o r t e r ma t u r i t y
a n d so n e e d ed s ub s e q u e n t r e f i n a n c i n g .
r
103
rs
c h a ng e s a t some po i n t d u r i ng t h e l i f e o f t he l oa n ) , a n d i t i s a l m o s t
er
is
Bo r r owe r s f r eq u e n t l y pay a s pl i t s pr e ad ( t h at i s , o n e wh i ch
a l way s t h e c a s e wh e n t h i s i s d o n e t h a t t h e s pr e ad fo r t h e e a r l y ye a r s
i s l owe r t h a n t h a t fo r t h e l a t e r y e a r s .
Th i s ,
i t m i g h t b e s u ppo s ed ,
d emon s t r a t e s t h a t l o ng e r ma t ur i t i e s c a n o n l y b e o b t a i n ed fo r h i g h e r
s p r e ad s .
nd
Bu t t h e r e a r e o t h e r po s s i b l e i n t e rp r e t a t i o n s o f th i s
phe nome non :
fo r e x ampl e , t h e spl i t s pr e ad c a n a l s o be reg a rd ed a s a
me a n s o f s h ad i ng s pr e ad s ,
t'
iv
fo r s pr e ad s a r e i nv a r i ab l y q u o t e d i n e i g h t h s
a n d c a n o n l y h a v e i n t e rmed i a t e v a l u e s b y spl i t t i ng t h e per i o d be twe e n
two spr e ad s ;
s o t h e f a c t t h a t t he l a t e r spr e ad i s cu s t om a r i l y h i g h e r
m a y s i mp l y b e a m a r k e t conv e n t i o n .
1 04
O n e appr o a c h t o e s t ab l i s h i ng t h e c o r. t empo r a n eo u s r e l a t i o n s h i p
be twe e n s pr e ad s a n d m a t ur i t i e s i s t o e x am i n e ag g re g a t e c r o s s - s e c t io n a l
d a t a , b u t o b s e r v a t io n o f a c r o s s- s e c t i o n al s amp l e o f h e t e rog e n eou s
bo r r owe r s co u l d be a v e ry u n r e l i ab l e g u i d e t o t he s pr e ad s g r ad i e n t
wh i c h e ac h f a c e s :
f o r e x am p l e ,
i f o n e c l a s s o f b o r r owe r s i s a b l e to
_
o b t a i n l o ng m a t u r i t i e s a nd l ow s p r e ad s w h i l e a no th e r g r o u p c a n o n l y
f i nd s ho r t- t e rm f i n a n c e , a n d a t h i g h sp r e ad s , s pr e ad a nd ma t u r i ty
wo u l d g i v e t h e a ppe a r a n ce o f b e i n g i nv e r s e l y r e l a t ed .
I n p r a c t i ce ,
s i m p l e OLS r eg r e s s i o n s o f spr e ad ag a i n s t m a t ur i t y fo r q u a r t e r l y
s ampl e s d o i n de e d s how s ig n i f i ca n t n eg a t i v e co r re l a t io n be twe e n t h em
a t some pe r i od s , m o s t n o t a b l y i n 1 9 7 7 a nd 1 9 7 8 ;
a t ime w h e n j u s t s u c h
s t r a t i f i c a t i o n o f b o r rowe r s w a s e v i d e n t .
105
Mo r e r e l i a b l e e v i d e n c e i s a v a i l a b l e f rom s t ud y i ng s p r e ad s a n d
m a t ur i t i e s f o r b o r r owe r s r a i s i ng m u l t i - t r a n ch e l o an s i n w h i ch l e nd e r s
h a ve a r a ng e o f f i n al ma t u r i t y op t io n s , o r f o r a s i ng l e bo r r owe r ( o r
compar ab l e b o r r ow e r s ) e n te r i ng t h e m a rk e t f r eq u e n t l y a t a r a n g e
o f m a t ur i t i e s d u r i ng a pe r io d o f s t a b l e ove r a l l m a rk e t con d i t i o n s .
:y
50
S u c h e x ampl e s a r e by n o me a ns c ommon a n d , g i v e n t h e v a r i a t i on s in
c o n d i t io n s ove r t h e p a s t two o r t h r e e ye a rs , i t i s pa r t i c u l a r l y
awk w a r d to f i nd c a s e s o f m u l t i pl e bo r r ow i n g a t w i d e l y d i f f e r e n t
ma t u r i t i e s .
N e v e r t h e l e s s , t h ey d o e x i s t ;
t h e mu l t i - t r a n ch e l o a
s hown i n t he c h a r t b e l ow a r e t a k e n f r om 1 9 8 2 a nd 1 9 8 3 , t he mul t i �
b o r row i n g s f r om 1 9 8 1 .
Th e s e i n d i c a t e t h a t bo r rowe r s a t t ho s e t i
f a c e d u pwa r d - s l op i ng s p r e ad s g r ad i e n t s , w i t h sp r e ad s i nc r e a s i ng
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by up t o h al f a pe r ce n t ag e po i n t f o r e a ch ad d i t io n al f iv e y e a r s of
matur ity .
S i m i l a r r e s ul t s a r e ob t a i n ed f o r mu l t i - t r a n ch e l o a n s
t h e 1 9 7 7/ 7 8 pe r i od , wh e n r eg r e s s io n r e s u l t s fo r f ul l , h e t e r og ene ou
s ampl e s s ug g e s t t he oppos i te .
Th e pr e c i s e m a g n i tud e o f t h e g r ad i
c a n n o t , h owe v e r , b e a c cu r a te l y d e t e rm i n ed f r om t h e s e r e s u l t s
t h e g r ad i e n t s a r e co ns t r u c t ed - o n a s t r a ig h t l i n e b a s i s - f r om
t h r e e o r fo u r o b s e r v a t i o n s ove r a spa n o f up t o e ig h t ye a rs m a t u r i
{c)
Lo a n s pr i c e d ov e r U S p r i m e r a t e
106
S i n c e 1 9 7 9 , a s i g n i f i c a n t n umbe r o f s y n d i c at ed c r ed i t s h ave
i n c l ud ed an opt i o n fo r b a nk s to commi t f un d s pr i ce d ov e r t h e US
r a t e r a t he r t h a n L I BOR .
On e impo r t a nt mo t i v a t io n fo r t h i s h as
t o e n cou r ag e i n c r e a s ed p a r t i c i p a t i o n i n t h e s y n d i c a t ed c r e d i t s
b y us r eg i o n a l b a nk s , s i n ce t he s e b a nk s d o n ot i n g e n e r a l h av e
51
t o L I BO R- b a se d f u nd i ng i n t h e i n t e r n a t i o n a l i n t e r b a nk m a r k e t a nd so
a r e r e l u c t a n t to t ak e o n L I BO R - b a se d a s s e t s .
Th i s wa s i n t e nd e d to -
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h a s - a s t he ch a r t s how s - b e e n s u b s t a n t i a l l y a b o v e L I BOR i n r e c e n t
H owe v e r , t h i s c omp a r i s o n i s po t e n t i a l l y m i s l e ad i ng s i n c e i t
years.
t a k e s no a c cou n t o f d i f f e r e n ce s i n t h e s pr e a d s c h a rg e d o v e r
a l t e r n a t i v e i n t e r e s t b a s e s , t he p r o t e c t i o n o f f e r ed by a " c ap "
( s ee
b e l ow ) , or t he v a l u e t o a bo r rowe r o f b e i ng ab l e t o t ap a w i d e r r a n g e
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c e r t i f i c a t e s o f d e po s i t )
pl u s a p r o f i t m a r g i n ,
a l t h o u g h t h e l a t t e r i s n ot
I n p r a c t i ce , t h i s m a r g i n v a r i e s
a s d o e s t h e s pe ed w i t h w h i c h p r i m e r a t e a d j u s t s t o
mov eme n t s i n t h e c o s t o f f u n d i ng .
L I B O R , h ow e v e r ,
i s a m a r k e t
d e t e rm i n ed r a t e w h i c h r epr e se n t s o n l y t h e r a t e a t wh i c h a ( u s u a l l y
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pr i m e ) b a n k wou l d o f f e r f u n d s i n t h e i n t e r b a nk m a rk e t .
1 08
S i n c e l a r g e U S b o r r o we r s h a v e a ch o i c e o f w h e t h e r t o bo r r ow a t
pr ime i n t h e d ome s t i c m a r k e t o r ov e r L I BO R ( pl u s s p r e a d )
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i t m i g h t b e t h o u g h t t h a t a rb i t r a g e w o u l d b r i ng t h e t wo
i n f o r m a t io n o n pr i m e r a t e s i s t o b e f o u n d i n P a rk ( 1 9 8 2 ) .
52
r a t e s c l o s e l y i n t o l i n e w i t h e a ch o t h e r .
Howe v e r , i n the l a t e
a nd e ar l y 1 9 8 0 s b a nk s i n t he U n i t ed S t a t e s we re w i l l i n g to l e n d
t h e i r m o r e - c re d i two r t hy co rpo r a t e cu s tome r s a t a r a t e bel ow pr im e
'
p e rm i t t i ng a c t u a l l e nd i ng r a t e s t o ad j u s t e v e n wh e n t he pr i m e ra t
r ema i n ed u n c h a ng ed .
Th i s , i n t u r n , m a y e xp l a i n w hy t h e d i f fe r e n t
b e twe e n p r i m e r a t e a n d L I BOR wa s so w i d e i n 1 9 8 1 a nd 1 9 8 2 .
1 09
M o s t pr ime - b a se d l o a n s i n t h e syn d i c a t ed c r ed i t s
c l a u s e wh i c h r e s t r i c t s t h e l ev e l o f t h e i n t e r e s t r a t e b a s e to an
l im i t d e te rm i n e d by a ma rg i n ( kn own as t he " c ap " ) o ve r the 9 0 - d ay
c e r t i f i c a t e o f d e po s i t ( CD ) r a t e , ad j u s t ed f o r US r e s e rv e
Th i s c ap i s t yp i c a l ly se t a t a ro u nd 1 0 0 b a s i s
7
( o ne pe r ce n t ag e po i n t )
wh i c h me a n s t h a t i f th e p r ime r a t e
r e q u i r eme n ts .
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e x cee d s t h e r e s e r ve - ad j u s t ed C D r a t e b y m o r e t h an o n e pe r ce n t age
t h e n t h e bo r rowe r w i l l pay t h e l e nd e r t he ad j u s t ed CD r a t e pl u s
p e r c e n t ag e po i n t p l u s t h e s pr e ad o n t h e l oa n .
pay t h e p r i m e r a t e pl u s s pr e ad .
Ot h e rw i s e , borr
Th e c h a r t s ug g e s t s t h a t t h e CD
m a y we l l h a v e b e e n t he ope r a t i v e b a s e for m u c h o f t h e p a s t f i ve
m ak i n g f u nd s c h e ap e r t h a n wo u l d be i nd i c a t e d by l ook i n g at pr ime t ho u g h s t i l l r a t h e r mo r e e x pe n s i v e ( f o r a g i v e n s pr e ad ) t h a n a
L I BO R b a se .
1 10
A n o t h e r r e l e v a n t m a rk e t pr a c t i c e i s t ha t , wh e re as t he L I BOR
r e fe r e n c e r a t e i s ad j u s t ed i n l i n e w i t h L I B O R a t r o l l ov e r d a t es t yp i c a l l y e v e r y t h r e e o r s i x mo n t h s - t o r e f l e c t p r e v a i l i n g market
co nd i t i o n s ,
t h e U S p r ime r e f e r e n ce r a t e ope r a t e s o n a con t i n uous
f l o a t i n g ba s i s , s o the e f fe c t i v e r e f e re n c e r a t e o v e r a n i n t e re s t
p e r io d i s t he av e r ag e v a l u e o f t h e p r i me r a t e r a t h e r t h a n i t s v a l
t he s t a r t o f t he p e r i o d .
A t t im e s o f r a p i d d e c l i ne i n i n t e re s t
r a t e s ( a s o c cu r r ed f r om m i d - 1 9 8 1 t o e a r l y- 1 9 8 3 ) , t h e a v e r a g e l evel
p r ime o ve r a s i x - mo n t h pe r io d c a n fa l l b e l ow t he l e v e l of L I BOR s
8
t h e b e g i n n i n g o f t he pe r io d
;
36
S e e P a rk
37
S e e C o s h am ( 1 9 8 4 ) .
38
S e e C o s h am ( 1 9 8 4 , p a g e 6 0 ) .
( 1 9 8 2 ) a n d T h e Ame r i c a n B a n k e r ( 1 1 M a r ch 1 9 8 2 , pag e
53
111
T a k i ng a c co u n t o f t h es e co n s id er a t i on s , Co s h am ( 1 9 8 4 ) c a l c u l a t ed
t h a t a h ypot h et i c a l s ev en - y ea r l o a n o v er 1 9 7 6 - 8 3 , w i t h a cap o f 1 0 0
b a s i s po i n t s a n d a s p r ead over p r i m e o f 3 8 b a s i s po i n t s b el ow t h e
s p r ead over L I BO R ( wh i c h wo u l d per h a ps h av e b een a n u n u s u a l l y w i d e
d i f f e r en c e fo r a l oa n a t t h a t t im e ) , wo u l d h a v e t ur n ed ou t t o be
o n l y 1 2 b a s i s po i nt s ea ch year mo r e ex p en s i v e to a bor r ower who
cho s e to pay in t er es t b a s ed on p r im e r a t h e r t h a n L I BOR .
Th i s s ma l l
d i f f er en c e m a y wel l b e wo r t hw h i l e i f i t w i d en s t he r an g e o f po t en t i a l
l end er s a nd so perm i t s l ower s p r ead s t h a n wo u l d o t h erw i s e be
A s a pr i m e b a s e m a k es i t ea s i er f o r b a nk s w i t ho u t a c c es s
po s s i b l e .
t o L I BO R - b a s ed f u nd i ng to p a r t i c i pa t e ( fo r ex ampl e ,
b a nk s ) , t h i s i s n o t a n impl a u s i b l e po s s i b i l i ty .
US
r eg i o n a l
I t wo u l d en abl e
bor rower s t o r a i s e l a r g er amo u n t s i n a s i ng l e c r ed i t , w i t h t h e
a d d i t io n a l co s t o f t h e p r i m e r a t e t r a n c h e t h e p r i c e p a i d fo r avo i d i n g
a h i g h er s p r ead over L I BO R - wh i ch m i g h t h av e b een n ec es s a r y h ad t h e
en t i r e l o a n b een pr i ced so l el y over L IB O R a nd s o been a t t r a c t i v e on l y
t o a n a r r ower r a ng e o f b a nk s .
M a rk et d ev el opm en t s
( ii)
,
.
112
A l t ho u g h a f ew s m a l l s y n d i c a t ed c r ed i t s ( fo r b o r r ower s f r om
Y u g os l av i a , I t a l y a nd C h i l e )
i nc l ud ed a p r i m e r a t e op t io n i n 1 9 7 9 ,
i t b eg a n to f ea t u r e w i d el y o n l y i n 1 9 8 0 , wh en t h e opt i o n wa s o f f e r ed
9
o � o v er $ 6 b n o f c r ed i t s
O f t h i s , n ea r l y $ 2 b n w a s a c co u n t ed
�
f o r by I t a l i a n b o r r ower s , wh i l e B el g i um , F i n l a nd , H u n g a ry a n d
Y u g os l av i a ea ch a n n o u n c ed l a rg e l o a n s :
r a i s ed sm a l l amo u n t s .
s i x L a t i n Amer i c a n cou n t r i es
I n a l m o s � a l l c a s es , t h e s pr ead o v er p r i m e
r a t e w a s s et a t 1 /8 p er c en t ag e po i n t b el ow t h e s pr ead o n t h e L I B O R
t r a n c h e o f t h e c r ed i t .
Th e op t i o n w a s ex t end ed t o a w i d er r an g e o f
b o r r ower s i n t h e n ex t t h r ee y ea r s .
op t io n to t a l l ed $ 5 1 b n loans to
US
I n 1 9 8 1 , c r ed i t s c a r ry i n g t h e
a l t h o u g h $ 3 7 b n o f t h i s w a s a c cou n t ed fo r by
b o r r ow e r s , m a ny i n c on n ec t i o n w i t h t ak eov er a c t i v i t y .
O u t s id e N o r t h Amer i c a , b o r rower s f r om A r g en t i n a , B r a z i l , Mex i co an d
I t a l y tog et h er a c c ou n t ed f or mo s t of t he b o r r ow i ng i n c l ud i n g a pr i m e
op t io n .
Th e d i f f er en t i a l between t h e s p r ead s o n t h e op t i o n s b eg a n t o
w i d en - I t a l y a nd t h e d ev el op i n g co u n t r i es c o n t i n u e d t o p a y o n l y 1 / 8
39
Th e ex t en t t o w h i c h t h e op t i o n w a s a c t u a l l y ex er c i s ed by l end i n g
b a n k s i s u n k n own , a l t h o u g h t ho s e c r ed i t s wh er e i n fo rm a t i o n i s
av a i l a b l e s u g g es t t h a t u p t o h al f o f t h i s l en d i ng m i g h t h a v e been
o v er a p r i m e b a s e.
54
po i n t l e s s o n t h e pr i m e op t io n th an ov e r L I BOR , b u t U S a nd C a n a d i
b o r r owe r s ob t a i n ed d i f f e r e n t i a l s o f 1 /4 po i n t ( a nd some t im e s 3 / 8
po i n t ) .
1 13
To t a l s f o r 1 9 8 2 a nd 1 9 8 3 r e ac h ed $ 1 6 b n a n d $ 1 1 b n r e s p ec t i
Howe v e r , wh i l e 1 9 8 2 r epe a t ed t h e pa t te r n o f 1 9 8 1 w i t h B r a z i l , Me x
a n d I t a l y d om i n a t i ng t h i s s e g m e n t o f t h e m a r k e t ( t og e t h e r repr e s
two- t h i r d s o f t h e 1 9 8 2 tot a l ) , t h e mo s t i n t e r e s t i n g d e v e l opm e n t
1 9 8 3 w a s t h e i n c l u s io n o f t h e opt i o n i n l a r g e s ov e r e i g n l oa n s fo r
0
a nd As i a n bo r r owe r s
T h e d i f f e r e n t i al b e t we e n spr e ad s ove r
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p r ime and L I BOR o n t h e s e l oa n s wa s t yp i c a l l y 3 /8 po i n t .
114
Th i s a c t i v i ty s u g g e s t s t h a t bo t h b a nk s a n d bo r rowe r s f o u nd
p r ime op t io n a u se f u l
i n n o v a t io n .
Howe ve r ,
i n the mor e f a vou r
c l ima t e f o r b o r r owe r s i n 1 9 8 4 , s e v e r a l a r e a t t e mp t i ng to re negot
t h e s pr e ad o ve r pr ime on r e c e n t l y s i g n e d l oa n s :
I t al i an bor rowe
h a v e b e e n pa r t i c u l a r l y a c t i ve i n t h i s r e s pe c t , r e n e g o t i a t i ng lo
t o t a l l i n g $ 1 . 9 b n wh i c h h ad be e n a r r a n g e d b e twe e n 1 9 7 9 a nd 1 9 8 2 .
i s a l s o wo r t h n o t i ng t h a t ,
i n t h e con te x t o f r e n eg o t i a t i o n s of
d eb t , o n e pr opo s al t o com e out of the J u n e 1 9 8 4 me et i ng o f L a t i n
Ame r i c a n co u n t r i e s wa s t h a t "
•
•
•
i n t e r n a t i o n a l b a n k s o u g h t t o use
r e f e re n c e i n t e r e s t r a t e s th a t i n no � a s e e x c e e d t h e t r u e c os t o f
r a i s i n g f u nd s i n t he m a r k e t a n d s h o u l d no t be b a s ed o n adm i n i s tr
r ates . "
Th i s wo u l d s e em t o s ug g e s t t h a t pr i m e - b a s e d bor row i n g s
l o s i ng f av o u r , a t l e a st w i t h t h e s e c o u n t r i e s .
(d )
T h e impo r t a n c e o f f e e s
1 15
A t te n t i o n i s commo n l y r e s t r i c t ed t o spr e ad s wh e n comp a r i ng
b o r r ow i n g co s t s f a c i ng d i f fe r e n t bor r owe r s o r wh e n try i ng to j u d
b a nk s ' r e l a t i v e r i s k a s s e s sm e n t s .
To d o t h i s i s t o d i s re g a rd t
f e e s wh i ch b o r r owe r s m u s t a l s o pay t o b an k s - a s d e t a i l e d i n Sec
I I a bo v e .
Th e s e c a n on o c c a s i o n fo rm a s ub s t a n t i a l e l eme n t o f
r e t u r n t o b a nk s , o r o f t h e c o s t to bor r owe r s , a n d - t h o u g h fee s
mo s t commo n l y o f o n l y sm a l l impo r t a n ce i n d i f f e r e n t i a t i ng be tw e e n
40
K i n g d om o f S w e d e n ( $ 1 . 6 b n ) , K i ng d om o f D e n ma rk ( $ 1 . 2 bn ) ,
K i ng d om o f S p a i n ( $ 7 5 0 m n ) a nd R e p u b l i c o f I r e l a nd ( $ 5 0 0 mn ) ;
a nd R e p ub l i c o f I nd o n e s i a ( $ 1 b n ) a nd F e d e r a t i o n o f M a l ay s i a
( $ 5 0 0 mn ) .
55
bor rowe r s wh e r e t h e s pr e a d s a re s im i l a r - i t i s a s we l l to be aw a r e o f
:'l
t h e po t e n t i a l
3
imp a c t o f f e e s an d to e x e r c i s e a d eg r e e o f c a u t i o n wh e n
r e l y i n g s o l e l y o n s p r e ad s d a t a .
1 16
i
Fo r c r ed i t s t h a t a r e d r awn d own ,
i t i s t he m a n a g em e n t a nd
pa r t i c i pa t i o n f e e s wh i ch a r e mo s t r e l e v a n t s i n ce t he s e r epr e s e n t
e
mos t o f th e u p- f r o n t r e t u r n t o b a n k s o n the i r l e nd i n g .
or
Th i s re t u r n
- a n d i n d e e d , t h e cos t to t he bor rowe r - i s ty p i c a �
i n th e reg i o n
o f 1 % o f t h e t o t a l amo u n t o f t h e l oa n , a l t h o u g h t
i s co n s i d e r ab l e
va r i a t i o n b e t we e n bo r r owe r s .
U n fo r t u n a t e l y , wh �
_ n f o rm a t i o n on
am o u n t s , m a t u r i t i e s a nd s pr e ad s i s u s u a l l y pub l i c A � � d , c ompl e t e d a t a
o n t h e f e e s pa y a b l e o n a s y n d i c a te d c r ed i t a r e r a r e l y m a d e a v a i l a b l e .
I n g e n e r a l , t h e a v a i l a b l e e v i d e n c e - wh i c h i s , o f co u r s e , l i m i t ed to
d e a l s o n w h i c h t he f e e s a r e p ub l i c i s ed - s ug g e s t s t h a t t h e l ev e l o f
f e e s move s i n l i n e w i th t h e l e v e l o f s p r e ad s , a nd t h a t t h i s appl i e s
b o t h wh e n m ak i n g a c ro s s- s e c t io n a l comp a r i s o n be twe e n bor rowe r s a n d
.
4 1
.
w h e n con s 1. d e r 1. ng t h e t e r m s f a c 1. n g b o r r owe r s o n a t 1me
s e r 1 e s b a s 1. s .
Bu t t h i s i s n o t a l wa y s t h e ca s e , a s t h e f o l l ow i n g e x amp l e s
d emon s t r a t e .
n
se
f
1 17
Th e f i r s t o f t h e c h a r t s ov e r l e a f pl o t s typ i c a l s pr e ad s a nd
f r o n t - e nd f e e s
42
( m a n ag em e nt pl u s pa r t i c i p a t i on ) o n e i g h t- y e a r
.
s y n d i c a t ed c r e d i t s ( w i t h a g r a c e pe r iod o f f o u r y e a r s ) r a i s ed by a
r
s
t) i
a
41
S e e , fo r e x ampl e , t he t ab l e c o n s t r u c t e d by t h e B a nk o f E n g l a nd
a n d r e p r od u c ed i n Jo h n s t on ( 1 9 8 3 , p a g e 1 7 0 ) .
M i l l s a n d Te r r e l l
( 1 9 8 4 ) r epo r t r e s u l t s b a s ed o n mo r e r e ce n t d a t a , wh i ch co n f i rm
t h i s g e n e r a l pr opo s i t io n .
42
I n ord e r to comp a r e f r o n t - e nd f e e s d i r e c t l y w i t h s pr e ad s , i t i s
n e c e s s a ry t o e x p r e s s t h em a s t he eq u i v a l e n t o f a s pr e ad pa y a b l e
I f t h e m a t u r i t y a n d g r a c e p e r io d o f t h e
ove r t h e l i f e o f a l oa n .
l oa n a r e k n own , a l l t h a t i s n ec e s s a ry t o d o t h i s i s t o a s s ume a n
appr opr i a t e d i s c o u n t r a t e a ppl i c ab l e o v e r t h e l i f e o f t h e l o a n .
Fo r e x ampl e , o n a n e i g h t-y e ar l o a n w i t h a fo u r - y e a r g r a c e pe r i od
a nd a d i s c o u n t r a t e o f 1 0 % , a 1 % f ro n t e nd f e e h a s th e s am e n e t
pr e se n t v a l u e a s a r u n n i ng m a rg i n o f 0 . 2 2 % .
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I
s t a t e - g u a r a n t e ed B r a z i l i a n b o r r owe r ove r t h e p e r i od 1 9 7 9 to 1 9 8 2 .
T h e f e e i s p l o t t e d a s a s p r e a d e q u i v a l e n t , a s s um i n g a d i s c o u n t r a te
1 0 % e a ch y e a r .
B e t we e n 1 9 7 9 a n d 1 9 8 1 t h e t yp i c a l s pr e ad r o s e fr om
0 . 8 8 % t o 2 . 1 3 % wh i l e ( a ct u a l ) f ro n t - e n d f e e s i n c r e a s e d f rom 1 . 2 % to
Th e re a f t e r , t h e s p r e ad r em a i ned con s t an t , b u t f e e s cont i n u
1 . 9% .
t o i n c r e a s e , r e a c h i ng 2 . 6 % i n t h e t h i r d q u a r t e r o f 1 9 8 2 , e q u i v a l ent
a s p r e a d of 0 . 6 % .
118
T h e s e co nd ch a r t s h o w s a n e x ampl e o f a bo r r owe r - N i g e r i a
w i l l i ng t o p a y h i g h e r f e e s , r a t h e r t h a n c o n c ed i n g a ny i n c re a s e i n
s p r e ad s .
N i g e r i a n bo r r owe r s h a v e c o n s i s t e n t l y p a i d s p r e a d s o f 0 .
b u t f r o n t - e n d f e e s i n c r e a s e d s t e ad i l y f rom 2 . 7 5 % i n 1 9 8 0
7% in 1983.
A s t h e c h a r t s hows , t h i s w a s e q u i v a l e n t t o p a y i n g a
s p r e a d o f o ve r 1 . 5 % i n a d d i t i o n to t h e a c t u a l s p r e ad o f o n l y j u st
h a l f t h i s ma g n i t ud e ;
a nd i t i s c l e a r t h a t , f o r t h i s bor rowe r a t
l e a s t , t h e s p r e ad p r e s e n t s a ve ry m i s l e a d i n g p i c t u r e o f t h e t r u e
Ot h e r i n s t an c e s w h e r e h i g h f e e s h a v e be e n u s ed t o d i s g u i se
terms .
h i g h b o r ro w i n g c o s t s a r e a l s o k nown , e sp e c i a l l y amon g s t e a s t b l o c
bo r r owe r s .
(e)
T h e e f f ec t s o f t ax a t i o n
1 19
The t a x a t i o n - b y bo t h t h e i r own an d bor rowe r s •
t a x a u t ho r i t i e s
o f t h e i n t e r e s t d u e t o b a nk s o n t h e i r i n t e r n a t i o n a l a s s e t s c a n me a n
t h a t t h e q uo t ed s pr e ad on a l o a n may n o t b e a n a c c u r a te me a s u r e o f
e i t h e r t h e co s t to t he bor rowe r o r t h e r e t u t n t o t he l e n d i n g ba nk s .
M a ny cou n t r i e s , e x e r c i s i ng t h e i r r i g h t to impo s e a t a x o n in t e r e s t
a r i s i ng f r om s o u r c e s w i t h i n t he i r t e r r i t o ry , l e vy a w i t h h o l d i n g t a x
( u s u a l l y a t a r a t e be twe e n 1 0 % a nd 3 0 % ) o n payme n t s o f i n t e re s t m a d e
to b an k s l o c a t ed o ve r se a s .
A t t h e s ame t ime ,
t h e l e n d i n g b a nk s m a y
b e l i a b l e f o r t a x a t i o n on t h e i r wo r l d w i d e i n come i n t h e co u n t ry i n
wh i c h t h ey a r e r eg a rd ed a s r e s i d e n t fo r t a x p u rpo s e s , s u c h i n come
' ll
1
i n c l u d i n g t h e s e s ame i n t e r e s t r e c e i p t s .
Ov e r s e a s b r a n c h e s may
l i k ew i s e be s u b j e c t to t a x a t i o n i n t he co u n t ry i n wh i ch t h ey a r e
l o c a t e d a s we l l a s i n t he i r c o u n t ry o f i n c o rpo r a t i o n .
I f no r e l i e f s
we re av a i l ab l e a b a nk m i g h t t h e r e f o r e b e s ub j e c t t o t ax a t i o n more t h a n
o n ce o n t h e s ame i tem o f i n come .
1 20
Howe v e r , t h e r e e x i s t a n umbe r o f way s o f m i t ig a t i ng t h e e f fec t s
o f t he d o u b l e t a x a t i o n c a u s e d by t h e ove r l a pp i ng o f t ax j u r i sd i c t i o n s .
Mo s t d e v e l op e d cou n t r i e s h a v e co n c l ud ed a s e r i e s o f b i l a t e r a l
tte
· om
to
ag r e eme n t s b as ed o n t h e O E C D Mod e l Do u b l e T a x a t i o n Ag r e eme n t
43
wh i ch e i t he r r e d u c e o r e l im i n a t e w i t h ho l d i n g t a x o n i n t e r e s t .
Fo r
e x ampl e , a n i l r a t e i s s pe c i f i ed i n t he U K 1 s a g r e eme n t s w i t h co u n t r i e s
s u c h a s D e nm a rk , G r e e c e , I r e l a nd , t h e Ne t h e r l a n d s , Sw e d e n a nd t h e USA ,
me a n i ng t h a t t he r ig h t t o t ax i n t e r e s t o n l e nd i ng t o b or r owe r s i n
t he s e c o u n t r i e s by b a nk s r e s i d e n t i n t h e U K r e s t s s o l e l y w i t h t h e U K
t a x a u t ho r i t i e s a nd n o t w i t h t h e t a x a u t ho r i t i e s o f t h e b or rowe r .
Wh e r e w i t h ho l d i n g t a x i s n o t e n t i r e l y e l i m i n a t e d o r w h e n no doub l e
t a x a t io n ag r e eme n t e x i s t s , l e nd i ng b an k s a re g e n e r al l y ab l e e i th e r
t o c r e d i t t h e f o r e i g n t ax p a id ( o f t e n u p t o a s t i p u l a t ed l im i t )
a g a i n s t d o me s t i c t ax e s - a s i n t h e U K - o r t o d ed u c t t he t ax pa i d
ab r o ad w h e n c a l c u l a t i ng t ax a b l e dome s t i c p r o f i t s .
I t i s po s s ib l e
i n m a ny c a s e s b y t h e a ppos i te u se o f d o u b l e t ax a t i o n t r e a t i e s t o
s t r u c t u r e a s y n d i c a t ed l oa n s o a s t o a v o i d t h e r eq u i r eme n t t o
w i t hh o l d t a x e s f r om p ay me n t s t o n o n - r e s id e n t l e n d e r s .
i se
43
See Un i ted N a t ions ( 1 9 7 9 ) .
58
121
H owe v e r ,
i f a l o a n c a n n o t be s t r u c t u r e d i n t h i s way , t h e bo r
may be r e q u i r ed u n d e r t h e l o a n ag r e eme n t t o pay th e f u l l amou n t of
i n t e r e s t to the l e n d e r s and to pay t h e wi t h ho l d i ng tax h im s e l f .
w i l l a l s o n orma l l y be s pe c i f i e d i n t h e l oa n ag r e eme n t th a t , s h o u l d
t a x be impo s ed o r i nc r e a s ed i n t h e f ut ur e , i t w i l l be pay a b l e by t
b o r r owe r .
Al t e r n a t i v e l y � t h e l e n d i ng b a nk s c a n ag r e e to " a bs o r b "
w i t hh o l d i n g t a x t h em s e l ve s b y r e ce i v i ng i n t e r e s t a f t e r d ed u c t i o n Of
t a x ( u s u al l y in r e t u r n for i n c r e a s ed compe n s a t i o n o n t h e l o an ) and
t h e n c l a im i n g t h e r e l ev a n t t a x cr ed i t f rom t h e i r own t a x au tho r i t i
F o r e x ampl e ,
i f w i t hh o l d i n g t a x we r e s e t a t 1 5 % , L I BOR we re 9 % and
q uo t ed spr e ad 1 % , t h e n th e b a n k wo u l d r ec e i v e i n t e r e s t at a r a t e 0
1 / 2 % and t he bor r owe r ' s t a x a u t ho r i t i e s wo u l d r e t a i n w i t h h o l d i n g
o f 1 5 % o f t he 1 0 % g ro s s i n te r e s t d u e .
On a l o a n o f $ 1 0 0 rnn , the n ,
t he bor rowe r wo u l d p a y $ 8 . 5 mn to t he b a nk s a n d $ 1 . 5 m n to i t s own
au thor i t i es .
H owe v e r , t h e b a n k s wo u l d a l s o r e ce i v e t a x ce r t i f i c
to t he v a l u e o f $ 1 . 5 mn , wh i ch cou l d be of f se t ag a i n s t t h e i r dome st
t a x l i ab i l i t i e s .
1 22
I n t h i s e x ampl e - wh i c h i s t yp i c a l o f bor rowe r s i n Me x i co -
t h e b ank s r ec e i v e ,
i n e f f e c t , a to t a l s um eq u i v a l e n t to $ 1 0 mn , b u t
t h e co s t to t he bo r r ow i n g co u n t ry a s a wh o l e i s o n l y $ 6 . 5 mn ,
eq u i v a l e n t to pay i ng 1 / 2 % b e l ow L I BOR .
Th i s g a in - wh i c h a r i se s
i f th e l e nd i ng b an k s ag r e e to a b s o r b t h e w i t h ho l d i ng t ax - m a y be
s h a r ed be twe e n t h e b o r r owe r a n d i t s t ax a u t ho r i t i e s .
1 23
Th r e e f a c t o r s pr o v i d e a d i s i n c e n t i v e to b an k s wh i ch co n t empl a
l e nd i n g t h a t i s s ub j e c t t o w i t hh o l d i ng t ax .
F i r s t , t h e r e may b e
a
d e l ay i n c l a im i ng t h e o f f se t t i n g t a x c r ed i t , r e d u c i ng t h e e f f e c t ive
s p r e ad bel ow t h e s t a t e d 1 % .
Howe v e r , t o e n cou r ag e b a n k s t o ab sorb
t h e w i t h ho l d i n g t a x , t h e bo r rowe r wo u l d s e e k to con c e d e a l owe r s
( by a m a rg i n o f , s ay ,
1 /8 % ) i n a n y a r r a n g eme n t wh e r e h e pa i d the
w i t hh o l d i n g t a x a nd t h e l en d i ng b a nk r e ce i v e d no t ax ce r t i f i c ate .
S e cond , t h e l e n d i n g b a n k ' s dome s t i c t a x a u t ho r i t i e s m i g h t p ut a 1
on t h e amou n t o f t a x �r ed i t s a ba nk c o u l d u se .
Fo r e x ampl e ,
n ow l i m i t s t h i s t y p e o f t ax r e l i e f to a m a x i mum d e eme d c re d i t
e q u i v a l e n t t o a w i t h h o l d i ng t ax r a t e o f 1 5 % a nd i n a d d i t io n , wh e r e
w i t hh o l d i ng t ax i s s pa r ed a s d e s c r i bed be l ow , r e q u i r e s t h a t a n
e q u i v a l e n t t o t h e v a l u e o f t h e t ax c r ed i t b e r eg a rd ed a s t a x a b l e
i n come .
Th i r d , s o m e t a x a u t ho r i t i e s a l l ow t a x cr ed i t s t o b e o f f
o n l y ag a i n s t t h e p r o f i t on t h e i n d i v i d u a l l o a n s g i v i n g r i s e to t h em
59
- a s i n the USA a nd J a pa n - on l y ag a i n s t t h e p r o f i t g e n e r a t ed by
ove r s e a s l e n d i n g a s a wh o l e .
Howe v e r , e v e n wh e n r e l i e f i s a v a i l a b l e
ag a i n s t t h e t a x l i a b i l i t y o n a ba nk ' s t o t a l
in come ( a s i n th e UK ) , t h E
b a nk m i g h t st i l l h a ve i n s u f f i c i e n t t a x a b l e pr o f i t to r e c l a im t h e f u l l
v a l u e o f t h e w i t h ho l d i n g t a x ab s o r be d .
,•
Of
10
1 24
Mo s t l e nd i n g to i n d u s t r i a l i s ed co u n t r i e s - wh i ch h a v e a c cou n t e d
f o r a r o u n d 5 0 % o f to t a l bo r row i n g i n t h e c r e d i t s m a r k e t s i n c e 1 9 7 2
-
i s e i t h e r e x emp t f r om w i t hh o l d i ng t ax bec a u s e i t i s d i r e c t to t h e
g ov e r nme n t c o n ce r n ed o r come s u n d e r a do u b l e t a x a t i o n ag re em e n t ,
o r e l i g i b l e f o r c r ed i t r e l i e f .
not ably those in A s i a ,
Bu t m a ny d e v e l op i ng co u n t r i e s -
s u c h a s I n d o n e s i a , M a l ay s i a , S i ng a po re a n d
S o u t h Ko r e a - h av e n e g o t i a t ed t ax t r e a t i e s w i t h i n d u s t r i a l i s ed
c o u n t r i e s wh i ch no t o n l y e l i m i n a t e w i t hh o l d i n g t ax i n re s pe c t o f
c e r t a i n l e nd i ng bu t i nc o rpo r a t e sp e c i a l t ax i n c e n t i v e s a s a s t i m u l u s
to f o r e i g n i nv e s tm e n t .
�st
Th e s e t ax - spa r i ng ag r e em e n t s wo rk by t h e
b o r rowe r ' s t a x a u t ho r i t i e s e x e mp t i ng f r om w i t hh o l d i ng t ax the
i n t e r e s t on c e r t a i n e l i g i b l e l o a n s , wh i l e t he b a nk s ' d ome s t i c t a x
a u t h o r i t i e s g i v e m a t c h i n g t a x re l i e f f o r t h e w i t h ho l d i ng t a x wh i ch
wo u l d h av e b e e n p ay a b l e b u t f o r t h e e x emp t i on .
Th i s r e l i e f , wh i ch
i s c a l c u l a t e d by appl y i ng t h e w i t h ho l d i n g t a x r a t e ( s u b j e c t i n the
U K to a l im i t o f 1 5 % )
to the b a nk s '
i n te r e s t r e ce i p t s , p u t s th e
b a nk s in a po s i t i o n to l e nd to appr opr i a t e b or r owe r s at a r e d u c ed
sp r e ad , wh i l e t he l o a n d o c u m e n t a t i o n w i l l i n c l ud e p r ov i s io n f o r a
r e t u r n to a n o r m a l spr e ad s h o u l d t h e t r e a ty b e r e v ok e d , o r i f t h e
r a t e o f w i t h ho l d i n g t a x i s a l t e r e d .
125
F o r e x ampl e , i n t h e c a s e o f a t a x - s pa r ed l o a n o f $ 1 m n o u t o f t h E
UK , w i t h L I BOR a t 1 2 % , a s pr e ad o f 1 / 4 % a n d a w i t h h o l d i n g t a x r a t e o f
1 5 % , t h e l e nd e r s wo u l d r e ce i v e a t a x c r ed i t o f $ 1 8 , 3 7 5 ( 1 5 % o f
1 2 1 /4 % ) .
U n d e r U K t ax p r ov i s i o n s , howe v e r , t h e v a l u e o f t h e c r ed i t
wou l d b e a d d ed t o t h e i n t e r e s t i n c ome o n t h e l oa n f o r t a x a t i o n
pu rpo s e s .
A s s um i n g co s t o f f u n d s a n d o t h e r e x p e n s e s e q u a l to L I BO R
a nd a c o r po r a t i on t a x r a t e o f 3 5 % , t h i s wo u l d p r o d u c e a l i ab i l i t y o f
$ 7 , 3 0 6 ( 3 5 % of t h e $ 2 , 5 0 0 pro f i t on t h e l o a n pl u s the $ 1 8 , 3 7 5 v a l ue
of the cred i t ) .
Ag a i n s t t h i s c ou l d b e o f f se t t h e v a l u e o f t h e
c r ed i t , l e a v i ng a n o t i on a l t ax c r ed i t o f $ 1 1 , 0 6 9 f o r o f f se t ag a i n s t
o t h e r co r po r a t i o n t a x .
60
1 28
Al tho u g h t h e r e t u r n to t h e bank s t hr o u g h t ax r e l i e f may
s u b s t a n t i a l l y e x c e e d t h e v a l u e of t he n o rma l s pr e ad ,
t he bor rowe r to o b t a i n a l o a n a t be l ow L I BOR ;
i t i s rare
s o t h e r e l i e f - wh
i s e f f e c t i v e l y pa id f o r by t h e c r ed i tor ' s t a x a u t ho r i t i e s - i s sh
b e t w e e n t h e bo r r owe r and t h e l e nd e r .
Th e a bs o l u te v a l u e of t he
re l i e f i s d e t e rm i n ed by the l ev e l of i n t e re s t r a t e s a nd th e ra t e
w i t hh o l d i n g t a x s p a r ed ( u p to a l im i t o f 1 5 % s o f a r a s t h e U K i s
c o n ce r n ed ) , s o a c o n s t a n t ( a l be i t r e l a t i v e l y l ow ) s pr e ad imp l i e s
t h e s h a r e o f t h e r e l i e f a c c r u i ng to t h e b ank s i nc r e a s e s a s i n t e r e
rates r is e .
Ag a i n , howe ve r , t h e ma g n i t ud e o f t a x - s pa r e d l e nd i ng
l im i t e d by t h e b a n k s ' pe r ce p t i o n s o f t h e i r f u t u r e ca pa c i t y to m
u s e o f t a x c r ed i t s .
1 27
Be twe e n 1 9 8 1 a nd 1 9 8 4 , n e a r l y $ 2 b n wa s r a i s ed t h roug h p u b l i
U K t a x - s pa r ed l o a n s , o f wh i ch m o r e t h an $ 1 b n w a s r a i se d by M a l ay
a l on e .
Howe v e r , t h e r e a r e l im i t s t o the amo u n t o f t a x - s p a r ed
l e n d i n g wh i ch c a n be u nd e r t ak e n ;
f o r i n s t an ce , t h e p u r po s e s of
s u c h l oa n s a r e u s u a l ly co n t ro l l ed by t h e r e c i p i e n t c ou n t r i e s un
t he i r own i n ve s tme n t r e g u l a t io n s .
128
A f u r t he r pr a c t i ce , wh i ch amo u n t s to u n i l a t er al t a x spar i n g ,
al s o been obse rved :
t h e l e nd i ng b ank r e c e i v e s i n t e r e s t i n f u l l
( L I BOR p l u s s pr e ad ) , b u t t he bor r owe r a l s o p r o v i d e s t he l ende r � i
t a x c e r t i f i c a t e w h i ch s t a t e s th a t t h e b a n k h a s r e ce i v ed i n t e r e s t
o f w i t h ho l d i n g t ax e v e n t h o u g h t h e r e i s n o t ax t r e a t y i n corpo r a t
t a x - s pa r i n g p r o v i s io n s .
I f t h e b a nk ' s t a x a u t ho r i t i e s a r e w i l l
t r e a t t he t a x c e r t i f i c a t e a s a n · a l l owab l e c r ed i t , a n d i f t h e bank
s u f f i c i e n t t a x a b l e c ap a c i ty to r ec l a im t h e f u l l v a l u e of t h e
c e r t i f i c a t e , t h e n t h e b a n k ' s r e t u r n c a n b e i nc r e as ed s ig n i f i c a n tl
Fu r t h e rm o r e , t he v a l u e o f t h e t ax c e r t i f i ca t e i n c r e a s e s w i t h the
o f in t e r e s t r a te s .
Fo r e x ampl e ,
i f L I BO R w a s a t 1 5 % a nd the s
a t 2 % , t h e b ank wou l d r e c e i v e i n t e r e s t a t 1 7 % .
I n a d d i t io n ,
t h i s i s r e g a rd ed a s b e i ng n e t o f t he n o t i o n al w i t h ho l d i ng t a x , t
c e r t i f i c a t e w i l l b e f o r a sum eq u iv a l e n t t o a n i n t e re s t r a t e of
( a s s um i n g a 1 5 % r at e o f w i t h h o l d i ng t ax o n g r o s s i n te r e s t paymen
2 0 % r a t h e r t h a n t h e 2 . 5 5 % ( 1 5 % o f 1 7 % ) wh i ch wo u l d appl y i f
l o a n we r e m a d e u nd e r t he t ax - s p a r i ng p r ov i s i o n s o f a d ou b l e ta x a t
a g r e eme n t .
61
129
H owe v e r , a l t h o u g h t h i s " t ax bo n u s " r e p r e s e n t s a s u b s t a n t i a l
bene f i t to the b a nk s ,
i t i s u s u a l l y r e g a r d e d a s b e i ng a w i n d f a l l g a i
a n d i s p r o b a b l y n o t r e f l e c t ed i n t h e l e v e l o f th e spr e ad ( a l t h o u g h
th e r e m a y b e i n f o rm a l a r r a ng eme n t s fo r pa r t o f t h e b e n e f i t to
b e p a s s e d b a ck s u b s e q u e n t l y t o the b o r r owe r ) .
Th i s i s bec a u s e
t he r e i s n o g u a r a n t e e t h a t t he b on u s w i l l co n t i n u e t o b e a v a i l a b l e t he t a x a u t ho r i t i e s o f e i t h e r t h e b a nk o r t h e b o r r owe r cou l d r e m ove
t h e b e n e f i t w i t ho u t t he b an k h a v i n g any r e co u r s e wh i c h wo u l d e n ab l e
i t to r e c ou p t h e l o s s .
li
g,
im
at
62
THE FUTURE OF THE MA RKET
VI
1 3 0 A s n o t e d i n the l a s t pa r t of s e c t i o n I V ,
pa s t t wo or
th r e e y e a r s
d e v e l opmen t s o v e r th e
i n the s ynd i ca t e d c r e ? i t s m a r k e t h a v e be e n
d om i n a t e d by t h e s e r i o u s d eb t se r v i c i n g d i f f i c u l t i e s a f f e c t i n g
m a ny E a s t b l oc a n d d e v e l op i n g c ou n t r i e s .
c a s t a h e a v y sha d ow o v e r t h e m a r k e t ,
be
no i mm e d i a t e p r o s p e c t o f r e l i e f .
Th e s e pr ob l ems h a v e
a n d on e f r om wh i ch the r e c a n
E v en th e m o s t op t i m i s t i c
c o mm e n t a t or s wou l d n o t e n v i s a g e a r e t u r n by th e s e ma j o r d e b t o r s to
s ub s t a n t i a l new m a r k e t bor r ow i n g w i th i n the n e x t t wo or thr e e
year s ,
some wh o s e pr o g n o s t i c a t i on s a r e a g ood d e a l
a n d th e r e a r e
m o r e g l oomy .
1 3 1 Mor e r e c e n t l y ,
t h e ma r k e t h a s come u n d e r s u b s t a n t i a l pr e s s u re
for bor rowe r s o f s e c u r i t i e s i s s u e s
f r om th e c ompe t i ng a t t r a c t i on s
Th e s u d d e n pr om i n e n c e a ch i e v ed by
i n t h e e u r om a r k e t s .
r a t e paper
( i n t h e f o r m o f n o t e s a nd n o t e
floating
i s suance fac i l i t i es
44
)
a n d t h e h i gh l y compe t i t i v e
Recen t Eu r oma r k e t Act t v t t y
t e r m s a v a i l ab l e t o qu a l i t y
Sbne
bor r ow e r s th r ou gh th i s r ou t e ,
se -
48 -
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a ch i e v e d i n th e l a t t e r pa r t of
the be s t r i s k s to s w i t ch th e i r
bor r o w i n g i n t o s e c u r i t i s ed form
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h a v e ma i n t a i n ed th e h i gh l e v el
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f i x e d - r a t e bond m a r k e t s - wh i ch
1 9 8 1 a f t e r s e v e r a l yea r s of
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o f pr i ma r y a c t i v i t y f i r s t
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a nd a w a y f r om th e s ynd i ca t e d
c r ed i t s m a r k e t .
ca s e s ,
I n some
th i s h a s b e e n at th e
e xpe n s e o f e x i s t i ng synd i c a t ed
l oa n s ,
wh i ch h a v e been r epa i d
4 4 I n t e r na t i o na l F i n a n c i n g Re v i ew ( 1 9 8 4 ) cont a i n s m u ch u s e f u l
i n f o r m a t i on on , a n d d i s cu s s i on o f , th e s e f a c i l i t i e s .
G3
be f o r e th e i r d u e d a t e a n d r e p l a c ed by i s s u e s o f
a f f o r d i n g th e b o r r o w e r s both ch e a p e r
f l e x ibi l i ty .
As
f u nd i n g a n d g r e a t e r
th e ch a r t mak e s c l e a r ,
by no m e a n s the p r e d om i n a n t
e
sec tor
th e c r e d i t s ma r k e t
i t was unt i l
wh en r e s ch e d u l i n g s a n d n e w money l o a n s a r e
n
f r om e u r o c r e d i t s
to e u r opape r
1 3 2 Th e t w o m a j o r
i n f l uences
is
f r om c r ed i t s
of
1 9 8 2 and ,
i ncl uded ,
even
th e s w i t ch
j u s t s e t o u t - t h e on e ,
th e o th e r ,
t o s e c u r i t i e s - h a v e t o g e th e r
w e a k e r a m o n g s t th e d e v e l op i n g c o u n t r i e s ,
a gen e r a l
a s w i t ch a w a y
sh a r p l y r e d u c e d
th e s ynd i c a t e d c r e d i t s m a r k e t b y both t h e b e s t
i n c r e a s i n g l y th e p r e s e r v e o f
i s now
st i l l evident .
r ed u c t i on i n d e m a n d s on th e m a r k e t s ;
0
secur i t i e s
the use
r i s k s a n d th e
l e a v i n g a ma r k e t
th a t
is
i n t e r m e d i a t e b o r r ow e r s - the h i gh e r
r i s k s a m on g s t O E C D b o r r ow e r s a n d thos e d e v e l op i n g co u n t r y
bo r r ow e r s wh i ch h a v e n o t e xpe r i e n c e d s e r i o u s d eb t s e r v i c i n g
d i f f i cu l t i e s .
Wh a t
f o r c e s a r e now l i k e l y t o shape th e
future
pa th o f th e m a r k e t ?
Gen e r a l
i n f l u e n c e s o n b a nk s '
1 3 3 P o t e n t i a l l y th e mo s t
i n t e r n a t i o na l
i mpor t a n t g n n e r a l
l e nd i n g
f a c t o r t o be c o n s i d e r e d
i n a s s e s s i n g th e ou t l ook f o r s yn d i c a t e d c r e d i t s
:h
is
th a t o f b a nk s '
s t r a t e g i e s a n d t a r g e t s f or
th e y e a r s ah e a d .
no t e d
a t i m e o f t r a n s i t i on d u r i n g wh i ch m a n y
i n th e I n t r od u c t i o n ,
Th e 1 9 7 0 s w e r e ,
as
ba n k s a r o u n d th e w o r l d w e r e a d j u s t i ng t o t h e oppo r t u n i t i e s ope n e d
u p b y th e
i n t e r n a t i o na l i s a t i o n o f e c onom i c a c t i v i t y .
ba l a n c e sh e e t s h a v e u n d e r g o n e a s ub s t a n t i a l
t r a n s f o r m a t i on ,
i n t e r n a t i o na l a s s e t s - o n c e a s m a l l pa r t o f th e i r
·m
is
It
s u ch por t f o l i o sh i f t s th a t ,
in t r a i n ,
th e n a t u r e o f
th e
a c c u m u l a t i on o f th e p r e f e r r ed a s s e t s c a n b e v e r y r a p i d ;
g i v e n t r a n s i t i o n i s compl e t ed ,
a r i t hm e t i c n e c e s s i t y ,
1 34 Qu i t e a pa r t
th i s r ap i d g r ow th mu s t ,
s l ow d ow n a n d k e e p m u ch m o r e
th e ov e r a l l g r ow t h i n b a nk s '
w i th
c l a i m s - now a
subs t a n t i a l e l em e n t o f t h e i r por t f o l i o s .
wh i l e th e y a r e
The i r
but ,
as a
as an
i n l i n e w i th
b a l a n c e sh e e t s .
f r om th e u nw i n d i ng o f t h e e f f e c t s o f
th i s
lo ng - t e r m p r o c e s s
i n i t i a t ed b y th e ch a n g e i n b a nk s '
th e r e a r e s e v e r a l
s t r a t e g i c f o r c e s m o r e d i r e c t l y i mp i n g i n g on
hor i zons ,
64
ba n k s '
pr e f e r r ed a l l o c a t i on o f a s s e t s b e t we e n d ome s t i c a n d
i n t e r n a t i on a l
a s sets .
c l a i ms ,
a n d the c ompo s i t i on o f tho s e i n t e r n a t i o n a l
Th e w a v e o f d e r e g u l a t i on i n the p r ov i s i on o f
s e r v i c e s i n many o f th e ma j o r
e x e r t i ng a pro found
f i na n c i a l cent r e s
in ba nk s '
d om e s t i c m a r k e t s but
ope n i ng up t o th e m n e w o v e r s e a s oppor t u n i t i e s
Th e s e pos s i b i l i t i e s h a v e th e po t e n t i a l
e f fects ;
suf fer ,
not
i s n o t on l y
i n f l u e n c e o n th e c ompe t i t i v e e n v i r onme nt a nd
b u s i n e s s oppo r t u n i t i e s
sheet
f i na nc i a l
i s a l so
i n the s e c e n t r e s .
t o c a u s e ma j o r ba l a nce
and wh i l e i n t e r n a t i on a l bu s i n e s s a s a wh o l e m a y
its
f o r m m a y ch a n g e s i g n i f i ca n t l y .
Of cour s e ,
s o me
ba n k s m a y w e l l h a v e b e e n p e r s u a d ed by r e c e n t d eb t d i f f i cu l t i e s
th a t
i n t e r n a t i o na l
l e n d i n g sh ou l d be a v o i d e d ,
c e r t a i n l y m u ch t a l k o f
s ma l l er
" pu l l i n g o u t "
i n s t i t ut i on s .
of d eb t o r s
But
i n d i f f i cu l t i es
r e s t r i c t s u ch b a nk s '
a n d the r e i s
- p a r t i c u l a r l y a m on g s t th e
th e i n e v i t ab l e c o n t i n u i n g r equ i r ement
for pa ck a g e s of
f i na nc i a l
s uppo r t w i l l
f r e e d om t o i mp l e me n t a n y s u ch s t r a t e gy ,
and
th e r e a r e m a n y ba n k s wh i ch r em a i n k e e n t o r e s ume m a r k e t l e nd i n g
wh e n c i r c u m s t a n c e s
th i s
j u s t i fy i t .
I t r ema i n s t o be s e e n wh e ther
t a l k o f r e t u r n i ng t o d ome s t i c b u s i n e s s w i l l be r e f l e c t ed i n
th e r e a l i t i e s o f l e n d i n g .
1 3 5 A s ubs i d i a r y po i n t wor th pa s s i n g m e n t i on h e r e ,
of b a nk s '
s t r a t eg i es ,
i s th e c o n s t r a i n t s on th e i r ab i l i t y to pu t
s u ch s t r a t e g i e s i n t o pr a c t i c e .
d i f f i c u l t i e s on th e i r
Th e r e s t r i c t i on po s e d by d ebt
f r e e d om o f m a n o e u v r e
Th e r e
in the i n t e r na t i on a l
Th e mor e g e n e r a l ba l a n ce sh eet
c on t e x t h a s a l r e a d y b e e n n o t ed .
i mpa c t of ba n k s '
i n the con t e xt
c a p i t a l pos i t i o n s m u s t a l s o b e b o r n e i n m i n d .
i s a w i d e s pr e a d t r e n d t ow a r d s
c a p i t a l r e qu i r e m e n t s
for bank s ,
s t r i c t e r a n d mor e pr u d e n t
s t i m u l a t ed a t l e a s t a s m u ch by the
p r ob l e m s m a n y ba n k s h a v e e n co u n t e r e d w i th d om e s t i c a s s e t s as by
the i n t e r n a t i on a l pr ob l e m s ,
at
a n d a c o n c e r t ed e f f o r t t o r e v e r s e
l e a s t ha l t - th e d ownwa r d t r en d
had been e v i d ent
ba nk s '
f or
s ome y e a r s .
i n ba nk s '
-
or
c a p i t a l r a t i o s wh i ch
Th i s w i l l t e nd t o c o n s t r a i n
ab i l i t i e s t o i n t e r med i a t e f l ow s by compa r i s o n w i th other
i n s t i t ut i ons ,
t o ba n k s o f
a nd
i s one of
f e e - e a r n i ng
the f a c t o r s b eh i nd the a t t r a c t i v en e s s
( r a th e r
o f f -b a l a nc e - s h e e t a c t i v i t i e s .
th a n a s s e t - c r e a t i n g ) b u s i n e s s a n d
65
1 3 6 Two f u r th e r g e n e r a l
f a c t o r s not ed
i n f l u e n c e s c a n be i d e n t i f i e d ,
both o f them
in th e I n t r od u c t i o n as h a v i n g c on t r i b u t ed t o th e
r a p i d g r owth o f th e e u r om a r k e t s
exer t i ng a d i f f e r ent
i n the 1 9 7 0 s b u t wh i ch m a y now b e
i n f l u e n ce .
Fi r s t ,
the pa t t e r n o f g l oba l
wea l th h o l d i n g i s sh i f t i n g a w a y f r om i n v e s t o r s w i th a pr e f e r e n c e
f o r b a n k d epos i t s a n d t owa.r d s
" t r a d i t i o na l "
to h o l d c l a i m s on u l t i m a t e bor r ow e r s .
pr od u c e r s '
i n v e s t or s mor e w i l l i n g
F u r th e r mo r e ,
oi l
p r e f e r e n c e s a r e th e m s e l v e s ch a n g i n g a n d th e i r
i n v e s t m e n t s t r a t e g i e s a r e b e c om i n g mor e b r oa d l y ba s e d .
e x t en t
th a t ch a n g e s i n th e pa t t e r n o f w e a l th h o l d i n g we r e a
con t r i b u t o r y f a c t or
now i n t r a i n w i l l
t
1 3 7 F i na l l y ,
1
To th e
t o th e g r ow th o f
th e e u r oma r k e t s ,
the ch a n g e s
t e n d t o r ed u ce th e l e v e l o f e u r om a r k e t a c t i v i t y .
the p r o s pe c t s
for
i n f l a t i on o v e r
the ne x t
few ye a r s
a r e f o r r a t e s s i g n i f i c a n t l y l ow e r a n d mor e s t ab l e th a n th o s e o f
th e 1 9 7 0 s .
Th i s w i l l
i mp r ov e th e c l i m a t e f o r f i x e d - r a t e
bor r ow i n g a n d c o r r e s pond i n g l y r e d u c e the a d v a n t a g e s o f
f l oat i ng - r a t e i n s t r umen t s .
Ad d e d t o the pr e v a l e n c e o f
f l o a t i n g - r a t e p a pe r a v a i l ab l e
f u r th e r
t
i ri the e u r oma r k e t s ,
r e d u c e th e pot e n t i a l d e m a n d
for
th i s w i l l
f l o a t i n g - r a t e s yn d i c a t e d
loans .
I n f l u e n c e s spe c i f i c t o s yn d i c a t e d
loans
1 3 8 Some h a v e s e e n th e eme r g e n c e o f t h e s ub s t a n t i a l d eb t
d i f f i c u l t i e s a f f e c t i n g s ome o f th e ma j o r
u s e r s o f th e s y n d i c a t e d
c r e d i t s m a r k e t a s c a s t i n g d o ub t on the s u i t ab i l i t y o f
:-� e
a s a f i na n c i n g t e ch n i q u e .
Th ey h a v e c o n c l u d e d th a t
e n c o u r a g e e x c e s s i v e c om pe t i t i on ,
ser v i c ing
u n d u l y th i n m a r g i n s ,
s yn d i c a t i o n
it
t ends
to
l a x r i sk
a s s e s s m e n t a n d o v e r l e n d i n g - w i th pa r t i c i pa n t s r e l y i n g o v e r m u ch on
the r e p u t a t i on of
th e i r own .
l e a d m a n a g e r s r a th e r
th a n f o r m i n g a v i e w o f
Th e y c o n t e n d th a t th i s w i l l
t a r n i sh th e ma r k e t ' s
i m a g e a n d m a k e b a n k s - a n d e v e n b o r r ow e r s - r e l u c t a n t t o
5
pa r t i c i pa t e i n f u t u r e .
cr i t i c i s ms ,
a nd
more r e a l i s t i c
o r i n o th e r
it
i s d o ub t l e s s
i n th e i r
forms ;
Th e r e
i s a n e l e m e n t o f t r u th
i n th e s e
t r u e th a t ba n k s w i l l n ow b e m u ch
l end i ng a c t i v i t i e s ,
be
th ey i n s yn d i c a t e d
bu t th e s e c r i t i c i s m s a r e n o t n e w ,
a n d a r e not
66
pe c u l i a r
th ey h a v e s u r f a c e d a t ma ny po i n t s
t o s y n d i c a t e d cr ed i t s :
i n the m a r k e t ' s l i f e a n d shou l d n ot be th o u gh t o f a s a n ov e l
r e a son f or p r e d i c t i n g th e m a r k e t ' s d e m i s e .
1 3 9 O f r a th e r mor e i mpor t a n c e i s the
sma l l er bank s ,
wh i ch
ob s e r v a t i on th a t man y of
f or m ed a s i g n i f i ca n t pa r t of
sh o w i n g r e l u c t a n c e t o co n t i n u e the i r
the m a j o r b a n k s ,
proc e s s ,
the m a r k e t ,
i n vol v e me n t �
pr e v i o u s l y h e a v i l y i n v o l v ed
the
are
e v e n s o me o f
i n the s ynd i ca t i on
a r e a ppa r e n t l y r e - e x a m i n i n g th e i r r o l e
i n the m a r k e t an d
a r e d e v e l op i n g c a pa c i t y t o e n g a g e i n o th e r a c t i v i t i e s l e s s
co n s t r a i n e d b y c a p i t a l a nd r i s k c o n s i d e r a t i o n s .
Some ba nk s a r e
r e por t ed t o h a v e d i sba nd ed or s ub s t a n t i a l l y s l i mm e d d own th e i r
synd i c a t i on d epa r t m e n t s a n d r e a l l o c a t e d s t a f f t o o th e r a c t i v i t i e s .
1 4 0 Wh e th e r
th i s
is
s i mp l y a t empor a r y ph a s e
i mpo s s i b l e t o d e t e r m i n e .
r i g i d i t i es
Par t l y ,
n o d oubt ,
th a t
it
is
cru c i a l
l i q u i d a s po s s i b l e ,
s yn d i c a t ed l o a n s
th a t
b a nk s c e r t a i n l y f e e l a t
a n d l i qu i d i t y h a s n o t b e e n a ch a r a c t e r i s t i c o f
i n th e pa s t :
a s n o t e d on pa g e 1 1 ,
i s one o f the r e a s o n s
for
it
i s by no
i n e x i s t i n g l oa n s ,
m a r k e t - e v e n i n q u a l i t y n a m e s - i s not
f or
b e c a u s e o f th e
th e i r r e m a i n i n g a s s e t s b e a s
me a n s e a s y to s e l l o f f p a r t i c i pa t i on s
1 4 1 Th i s
i s a s yet
i mpo s ed on pa r t s o f th e i r ba l a n c e sh e e t s by
r e s ch ed u l i n g s and u n s pon t a n e o u s l e n d i n g ,
pr e s e n t
it
and the
s ub s t a n t i a l .
th e s u r g e i n a c t i v i t y i n not es ,
the s e - wh i ch a r e a ppa r e n t l y n ow h e l d by ba n k s
i n s ubs t a n t i a l
q u a n t i t i e s - a r e e a s i l y t r a d e d a n d c e r t a i n l y appe a r t o b e h i gh l y
l i qu i d
( bu t th i s c o u l d ch a n g e
d i f f i cu l t i e s ) .
i n f l ex ibl e .
Th e c r ed i t s m a r k e t
Th e
pa r t i c i pa t i on s ,
faci l i t i es
i f t h e b o r r ow e r g e t s
h ow e v e r ,
i n c r e a s i ng e v i d e n c e o f t r a d i ng
and the r ecent
( a s yet
i s not ,
i nt o
comp l e t e l y
in
i n n o v a t i on o f t r a n s f e r ab l e l oa n
l i t t le used ,
b u t a t e ch n i q u e wh i ch c o u l d
r e s t or e s o m e o f th e a t t r a c t i v e n e s s o f c r ed i t s by mak i n g th em
r ea d i l y t r a ns f e r abl e ) ,
show th a t t e ch n i q u e s
f l e x i b l e a n d c a n a d a p t t o ba nk s '
i n the m a r k e t a r e
a n d bor r ow e r s '
pe r ce i v e d n e e d s .
I f th e s e a s p e c t s o f th e m a r k e t c o n t i n u e t o d e v e l op ,
they w i l l a d d
t o i t s a t t r a c t i v e n e s s a nd h e l p t o o v e r come s o m e o f t h e compe t i t i v e
67
th ey m a y r e s u l t
e d g e now shown by the s e c u r i t i e s ma r k e t s ;
r a th e r d i f f e r en t m a rk e t ,
but
i t w i l l be o n e wh i ch
is
in a
st i l l
i d e n t i f i a b l y th e s y nd i c a t e d c r e d i t s m a r k e t .
142
In sum,
grea ter
th a t
or
th e r e a r e v a r i o u s
f o r c e s a t w o r k wh i ch m a y to a
l e s s e r e x t e n t mov e th e e u r oma r k e t s - a n d ,
f o r s ynd i c a t e d c r e d i t s -
s e en d u r i n g th e 1 9 7 0 s ,
be i n g m a d e o n th e m .
th e l i k e l y s t r e n g th o f
b e t w e e n th em .
i n a d i r e c t i on d i f f e r e n t
a s th e y e v o l v e t o m e e t
Bu t
th e r e
f r om th a t
th e n e w d e m a n d s
i s c o n s i d e r ab l e u n c e r t a i n t y ab o u t
th e s e pr e s s u r e s a n d th e pr ob a b l e ba l a n c e
Th e r e a r e s i g n s ,
i n the r e c e n t
t r a n s f e r ab i l i t y t o th e s ynd i c a t e d c r e d i t ,
t oo
w i th th e m ,
i nnova t i ons add i n g
th a t t h e c r ed i t s ma r k e t
i s a d apt i n g t o th e ch a n g e s t a k i n g p l a c e ;
a n d i n a n y mark e t
th e r e i s a c e r t a i n i n e r t i a wh i ch e n a b l e s e x i s t i n g i n s t r um e n t s
s ur v i v e
i n c i r c u m s t a n c e s wh en th ey wou l d n o t b e u s e d w e r e th ey n o t
a l r eady ava i l a bl e .
i mm i n e n t ; b u t ,
ou t s t a n d i n g ,
by the
to
at
A s i g n i f i c a n t r e c o v e r y i n th e m a r k e t
th e v e r y l e a s t ,
th e s ub s t a n t i a l
a n d th e l o n g - t e r m c l a i m s
s t ock o f
i s not
cred i t s
i n synd i ca t e d for m c r e a t e d
r e s ch e d u l i n g s wh i ch h a v e r e c e n t l y t a k e n p l a c e ,
th e s yn d i c a t ed c r e d i t w i l l b e w i th u s f o r
m e a n th a t
s o m e t i m e t o come .
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c r ed i t s ' .
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PA RK ,
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N F E.
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t a x t r e a t i e s b e t we en d e v e l op ed a n d d e v e l op i ng coun t r i e s .
Yo r k :
New
UN .
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i n ne
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N e w York :
UN .
AN N E X
1
-
BAN K
OF
EN G LA N D
D A TA :
M E T H O DO L OG Y
B a s i c c r i t e r i a fo r i n c l u s i o n
The B a n k o f E n g l a nd d a t a r e l a t e t o n e w sy n d i c a te d me d i um - t e r m
e u r oc u r r en cy c re d i t s f o r wh i c h t h e m i n imum d e t a i l s o f bo r r owe r a nd
amo u n t a r e k n own .
Th e c r i t e r i a fo r i n c l u s i o n a re a s f o l l ow s :
N ew
g-
I n ad d i t i o n to o r d i n a r y n ew l o a n s , a l o a n t h a t r e p l a c e s a pr ev i o u s
l o a n ( o r l o a n s ) wh i ch h a s b e e n r ep a i d e a r l y ( r e f i n an c i ng ) i s g e n e r a:
a l s o a dm i t te d .
Wh e n a n e x i s t i ng c r ed i t i s r e s t r u c t u r ed , i t w i l l b(
i n c l u d ed a s a n ew c r e d i t i f t he s i z e , t h e m a t u r i ty o r t he m a k e up o 1
t he s y n d i c a t e h a ve b e e n s u b s t an t i a l l y a l t e r ed , b u t n o t i f on l y t h e
s p r e ad h a s ch a n g e d .
Synd i c a t i o n
!SS
S y n d i ca t i o n by a g r o u p o f b a n k s t o a r a ng e o f pa r t i c i pa t i n g b a nk s i s
n o t s t r i c t l y n e c e s s a r y : c l u b d e a l s , wh e r e n o s e l l i n g d own by a
�nt
ma n a g eme n t g r o u p i s i n v o l v ed , a r e a l s o i n c l ud ed , b u t d e al s wh e r e o n e
b a nk i s t h e s o l e pr o v i d e r o f f u n d s a r e e x c l ud e d .
Th e v a s t m a j o r i t y
o f d e a l s i nc l ud ed a r e , howe v e r , s y n d i c a t i o n s i n t he s t a nd a rd s e n s e .
M e d i um- t e rm
U n t i l t h e e nd o f 1 9 8 2 , o n l y c r ed i t s w i t h a n o r i g i n a l f i n a l ma t ur i ty
1
o f a t l e a s t t h r e e y e a r s we r e i n c l u d ed i n t h e B a nk o f E n g l a n d d a t a .
Howe v e r , i t wa s t h e n b e c om i n g c l e a r t h a t an i nc r e a s i ng amo u n t of
s y n d i c a t ed l e nd i ng w a s b e i ng d o n e in t h e o n e - t o- t h r e e y e a r b a n d ; s o
i t w a s d ec i d e d t o e x t e nd t he m a t u r i t y r a ng e d own t o o n e y e a r .
d a t a we r e re v i s ed b ack t o 1 9 7 9 t o r e f l e c t t h i s c h a ng e ;
The
in 1 9 7 9 , t h e
a d d i t io n a l l o a n s t h e r eby i n c l ud e d amo u n t e d t o some $ 6 b n , 7 . 7 % o f
t he ye a r ' s tot al .
E u r o c u r r e n cy
T h e b o u n d ar i e s d e f i n ed by t h i s c r i t e r i o n ar e pe r h a p s t he h a r d e s t
i d e n t i f y pr e c i s e l y , b e c a u s e t h e r e i s o f t e n n o c l e a r d i r e c t e v i d � n
o f wh e t h e r o r n o t f u n d s r a i s ed i n t h e e u r om a r k e t s ar e be i n g u s e d .
Th e i n t e n t i o n i s to i n c l u d e l oa n s f o r wh i ch a t l e a s t par t o f t h e
f u nd i n g i s f r om t h e e u r om a rk e t s , s o l o a n s wh i ch s how ev i d e n ce o t
d ome s t i c f u nd i n g { eg d o l l a r l o a n s w i t h US pr ime opt i on s ) a r e no t
a u t om a t i c a l l y e x c l u d ed .
I n g e n e r a l , i t i s a s s umed t h a t t h e pr e s e n ce i n a l e n d i ng synd i c a
o f a t l e a s t o n e b a nk { i n cl ud i n g f o r e i g n b r a n ch e s a nd s ub s id i a r i e s
l oc a t ed ou t s i d e t he c o u n t ry o f t h e c u r r e n cy i n wh i c h t he l o an i n
d e n om i n a t ed i s a pr i m a f a c i e i n d i c a t i o n t h a t t he l o a n h a s been
f u n d e d at l e a s t in p ar t f r om t h e e u r o c u r r en cy m a r k e t .
I n t h e c a s e o f e u r od o l l a r l oa n s , t h i s n o rm a l l y r e q u i r e s t h a t pa rt
t h e l o a n h a s be e n m a d e by b ank s phy s i c a l l y o u t s i d e t he US - eg i n
E u r ope or i n o f f s h o r e c e n t r e s s u c h as t h e B a h am a s or t he N e t h e r l a
An t i l l e s .
I n ad d i t i o n , t he d e f i n i t io n al s o e n comp a s s e s c a s e s wh
a d o l l a r l o a n i s book ed t h r o u g h t h e h e ad o f f i c e of a US b a nk b u t
f i n a n c ed by b o r r ow i n g i n t he e u r od o l l a r m a r k e t ; a s pr e ad b a s ed on
t h e Lon d o n l n t e r b a n k O f fe r ed Ra t e ( L I BOR ) i s a g ood i nd i c a t ion t h
t h i s i s i n fact the case .
Howev e r , t h i s i s n o t concl u s i v e an d
a c r e d i t m a y i n pr a c t i ce b e d i f f i cu l t t o d i s t i ng u i s h f r om a loan
s
wh i ch i s f i n a n ced t h rou g h b o r row i n g in t he d ome s t i c c u r r en cy mark
so i t wo u l d g e n e r al l y not be i nc l ud ed i n t he f i g u r e s u n l e s s t he r e
e v i d e n ce o f pa r t i c i p a t i o n b y n o n-US b a nk s i n t he l oa n .
Lo ans w i
s pr e a d s q u o t ed above , fo r e x ampl e , U S p r ime r a t e a re , howe v e r ,
i n c l u d ed i f i n a l l o t h e r r e s pe c t s t h ey appe a r to s a t i s fy t he c r i t
for in c l u s i on .
I n s umma ry , t h e r e f o r e , t he f o l l ow i ng a r e l ooked fo r to d e t e rm i n e
w h e t h e r a l o a n i s a e u r o c r ed i t :
{ 1 )
Re f e r e n ce t o s pr e ad s t h a t a r e r e l a te d to L I BOR o r a s i mi l a r
e u r o c u r r e n cy i n t e r e s t r a t e b a s e ; a nd
3
(2)
P a r t i c i p a t i o n o f ba nk s l o c a t ed ou t s id e t he coun t r y o f t h e
c u r r e n cy i n vo l ved .
I n pr a c t i ce , mo s t e u r o c r ed i t s a r e e a s i l y i d e n t i f i a b l e a n d t h e a bove
t
r u l e s n e e d on l y b e a ppl i e d t o a f e w ma rg i n a l ca s e s .
e
cl ,
e
f
2
E x c l u s i ons
Lo a n s wh i ch a r e n o t u l t im a t e l y t he r i sk o f t h e l e nd i n g b a n k s a r e
t
e x c l ud ed .
Th i s pr i n c i p a l l y ex c l ud e s e x po r t- r e l a t e d l e nd i n g wh i ch
i s cove r ed by c r ed i t o r g ove r nme n t g u a r a n t e e s :
i f only p a r t of a l oan
i s s o g u a r a n t e ed , o n l y t h a t po r t i o n i s e x c l u d ed . 1
a
es
n
L o a n s wh i ch a r e a n n o u n c e d a s s t a nd by f a c i l i t i e s , o r f o r wh i c h i t i s
o t h e rw i s e c l e a r t h a t d r awd own i s u n l i k e l y , a r e a l s o e x c l u d ed ( t ho u g h
i f e v i d e n c e s u b s e q ue n t l y eme r g e s t h a t u s e h a s b e e n m a d e o f s u c h
f a c i l i t i e s , t he y a re i n c l u d ed i n t he t o t a l s ) .
rt
in
I t i s o f cou r s e
n o t n o rm a l l y k n ow n wh e t h e r an y pa r t i c u l a r l oa n h a s i n f ac t b e e n
d r awn :
t h e o b j e c t i v e i s s imp l y t o e x c l u d e t ho s e fo r wh i ch t h e r e i s
la
s t r o ng ev i d e n ce t h a t t h ey h a v e no t a nd w i l l n o t b e u s ed .
t
O n e g r e y a r e a , o f some s i g n i f i c an ce i n t e rm s o f i t s m a g n i t ud e ,
wh
on
th
is
t h a t of s t a nd by f a c i l i t i e s a r r a n g e d - l a r g e l y , t h oug h not e x c l u s i v e l y ,
by US c o r po r a t io n s - i n t he c o u r s e o f t ak e ov e r ac t i v i t y .
Such
f a c i l i t i e s we r e p a r t i c u l a r l y n u me r o u s i n t he l a t e S umme r of 1 9 8 1 :
n
rk
re
wi
a n d a b ou t $ 3 5 b n a r e i n c l u d ed i n t he d a t a f o r t h a t pe r io d a s
s a t i s f y i ng t h e b a s i c e u r o c u r r e n cy c r i t e r i a a n d s h ow i ng ev i d e n ce o f
h a v i n g be e n d r awn ( am ou n t s t o t a l l i ng s ome $ 4 0 b n we r e o r i g i n a l l y
compl e t ed , b u t s ome we r e w i t hd r awn ) .
Th e r e w a s a s im i l a r f l u r ry o f
a c t i v i t y e a rl y i n 1 9 8 4 , wh e n f o u r d e a l s t o t a l l i n g $ 3 5 b n we r e
it
a r r a ng ed .
A s i t i s no t ye t c l e a r wh e t h e r mo r e t h a n a sm a l l amou n t
w i l l ev e r b e d r awn ( a t l e a s t o n e d e a l , wo r t h $ 1 2 b n , h a s a l r e ady
b e e n c an ce l l e d ) , t h e s e h a v e no t y e t b e e n i nc l u d ed .
e
ar
I t s h o u l d b e n o t ed t h a t c om me r c i a l b a n k s ' p a r t i c i pa t i o n s i n
l o a n s m a d e a s p a r t o f e o- f i n a n c i ng a r r an g em e n t s w i t h t h e Wo r l d
B a n k a r e i n c l u d e d i n t h e d a t ab a s e ( a l t ho u g h t h e w o r l d B a nk
po r t i o n i s n o t ) b e c a u se t hey a r e n o t g u a r a n t e ed .
4
3
I n f o rm a t io n r e cord ed
A w i d e r a n g e o f i n f o rm a t i o n is r e c o r d e d for e a c h i nd i v i d u a l c r ed i t
i n p r a ct i ce , by n o me a n s e v e ry d e t a i l o f e a ch l o a n i s a l w a
ava il able .
Mo s t o f t h e i t ems r e co rd ed - s u c h as t he i n t e r e s t ra
though ,
b a s e , s p r e ad , m a t u r i t y , g r a c e pe r i od , f e e s , m a n a g i n g b a nk s - a re
s e l f - e x p l a n a t o ry , t ho ug h two d o pe r h a p s c a l l f o r p a r t i c u l a r
her e :
a n n o u n c eme n t d a t e an d n a t i o n a l i t y o f bo r rowe r .
t he a n n o u n ceme n t d a t e i s t he p u b l i c a t i o n d a t e o f t h e sou r ce i
wh i ch t h e a n n o u n c em e n t o f a l o a n i s f i r s t n o t ed .
Th i s w i l l
wh e n f i rm d e t a i l s o f amo u n t , s pr e ad , m a t u r i ty a n d l e ad man ag
a re a n no u n c ed r a t he r t h a n u n c on f i rm e d o r pro v i s i o n a l t e rms .
F u r t he r de t a i l s m a y b e ad d ed t o o u r re c o rd s l a t e r , i n c l u d i ng
c h a ng e s i n t h e s i z e o f l o a n f r om t h at i nd i c a t ed a t a n n ou n c e
d u e t o ove r- o r u nd e r- s u b s c r i p t i o n .
a r e rev i s ed .
I n s uch c a s e s , the figu
On occ a s i o n , a lo a n i s not p i c k e d u p u n t i l a f t
i t i s s i g n ed o r compl e t ed ;
i n s u c h c a se s , t h e an n o u n c eme n t d
i s t re a t ed a s be i ng t h e mo n t h pr e c e d i ng t h e mo n t h o f compl e t
T h e n a t i o n a l i ty o f bo r r owe r i s u s u a l l y c l e a r i n t h e sou r c e , b
pr obl e m s m a y a r i s e f o r a s u b s i d i a ry wh o se p a r e n t \ s o f a
d i f f e r e n t n a t io n a l i ty t o t h e c o u n t ry o f i n corpor a t i o n o f the
b o r r owe r .
The p r ac t i c e adopt ed i s to c l a s s i fy t he c r ed i t
un
t he n a t io n a l i ty of t h e s ub s id i a ry comp a ny u n l e s s i t i s c l e a r
t he s ub s id i a ry i s m e r e l y a f i n a nc i a l o n e o r t he c r ed i t b e a r s
gu a r a n t e e o f t h e p a r e n t .
W h e n , i n t h e c a s e of no n- f i n a n c i al
s ub s i d i a r i e s , t he p r e c i s e e x t e n t o f f o r e ig n own e r s h ip is no t
c l e a r , t he s u b s id i a ry i s c l a s s i f i ed u n d e r t h e cou n t ry o f
i n corpo r a t i o n ; a s im i l a r pr a c t i c e i s adop t e d i n c as e s wh e r e t
l o a n i s g u a ra n t e ed by t h e g ov e r nme n t o f , o r some o t h e r
i n s t i t ut i o n w i t h i n , t h e cou n t ry o f i n c o rpo r a t i o n .
g ro u p i ng s u s ed
i n t h e t ab l es a r e s e t o u t i n A n n e x 2 .
T h e co u n t
AN N E X
it
2 - COU NTRY CLAS S i r i CAT l ON
Be l g i u m
C�n�da
F r a n ce
( G e r m � ny
I t aly
J�pan
).
1
( L u x embo u r g ]
N e t h e r l a nd s
( Sw i t z e r l a nd ]
U n i t e d 1< 1 n g d om
U n 1 t e d S t a t e s o f Am e r i c a
( \O e s t ) J
Au 6 t r a l i a
Au s t r i a
D e nm � rk
F i n l a nd
Greece
[ I c e l a nd ]
I r el and
9JL!.!Jls>�
Al ge r i �
Bahr � i n
(Brunei l
E c u �d o r
[ G � bo n ]
I n d ones i �
Ir�n
I r aq
4.
)( u w� i t
[ L i by � ]
N iger i�
[ Om � n ]
ro�t a r ]
S�ud i A r ab i a
Tr i n i d a d ' To b a Q o
U n i t e d A r � b Em 1 r a t e s
( i n c l u d i n g A b u Dh a b i ,
Dub a i )
Venz u e l �
New Z e a l and
Norway
Po r t ug a l
Spain
Swe d e n
Tu r k e y
Y u g os l av i a
E a s t e r n b l oc
( A l ban i a ]
Bul g a r i a
C z e c h o s l ov a k i a
E a s t Ge r m a n y
H u n g a ry
Po l a n d
Jlorr. a n 1 �
Sov 1 e t U n i o n
!-.!'.!l !l�.!' r i e a
5.
N e!"].L l n d u s_t r i � l i� c o u n t r i e s
6.
N e t o i l e�o r t e r s
7.
Other
B.
Others
9.
I��!!l a t i o n a l
�1
t
l dcs
( N ICs )
( N OE DC s )
( M a j o r bor r ow e r s o n l y l
2
A r g en t i n a
Brazil
H o n g l< o n g
( S i n g a po r e ]
S o u t h l<o r e �
Ta i � a n
M e x i co
Pe r u
( B u rm a )
M a l ays i a
__
[ An g o h ]
[ Co n g o ]
[ TU n l S l a ]
I nd i a
P�k i s t a n
P h i l i pp i n e s
P a p u a N ew G u i n e a
Th a i l a n d
Bol i v i �
Ch i l e
Co l omb i a
Costa R i c a
Cuba
P a n am�
U r u g u ay
� J d ci l e_J
[ Sy r a ]
E s :,·F �
I v o r y Co a s t
Mo r o c c o
S ud �n
Za ire
Z am b i a
Jord�n
Sou t h A f r i c �
Ch i n �
I n s t i t u t i on s
( M a j o r bo r r owe r s o n l y )
E u r ope � n E c o n om i c Comm u n i t y
I n t e r n � t i o n a l I n v e s tme n t B a nk
A f r i c an Dev e l opm e n t S a n k
C o u n t r i e s wh i c h h av e n o t be e n ma j o r bo r r owe r s
b r ack e t s .
2
Afr i ca
Al l
cou n t r i e s
not
spe c i f i ed
in other
l i sts
( l es s t h a n
fal l
$1
b n s i n ce
i n t o t h i s c a t eg o r y .
1 97 2 )
a r e a h own
in
squ�re
I NDE X T O TAB L E S
1
N u mbe r o f s y n d i c a t ed l oa n s a nn ou n ced
2
Va l u e o f s y n d i c a t ed l o a n s a n n o u n ced
3A
Rece n t res ched u l i ng s
3B
R e c en t l y s yn d i c a t ed ' n ew money ' l o a n s
4
S t a t i s t i c s o f l o an s i z e d i s t r i b u t i o n
5
C u r r e n cy o f d e nom i n a t i o n
6
Me an s y n d i c a t i o n t im e s
7
E s t i m a t ed d r awd own o f s y n d i c a t ed l o a n s
8
E s t i m a t ed r ep ayme n t s o f s yn d i c a t ed l oa n s
9
E s t im a t ed n e t s y n d i ca t e d l e nd i ng
10
E s t im a t ed s t ock o f s y n d i c a t ed l oa n s ou t s t a nd i ng
11
Na t i o n a l i ty b r e akd own o f s y n d i c a t ed l o a n ma n ag e r s
12
Va l u e o f s y n d i c a t ed l o a n s u se d i n me a n spr e ad s c al cu l a t i on s
13
Me a n s pr e ad s
14
Va l u e o f s y n d i c a t ed l oa n s u se d i n me a n ma t u r i t i e s c al c u l a t io
15
M e an f i n al ma t u r i t i e s
16
M e a n ave r a g e ma t u r i t i e s
Th e d a t a p r e s e n t e d i n t he s e t ab l e s a r e b a s e d on i n fo rm a t io n to h a
o n 1 4 J a n u a ry 1 9 8 5 .
for 1 9 8 4 04
ava il abl e .
-
Th e mo s t r e c e n t f i g u r e s - i n pa r t i cu l a r , t
may t h e r e f o r e b e r e v i s e d a s f u r t h e r i n fo rma t i on be e
TABLE 1 :
OECD
MA J
MlN
1 97 2
1 973
1 974
1 975
1 97 6
1977
1 978
1979
1 980
1 98 1
1 9 82
1 983
1 984
85
73
107
54
59
62
111
113
148
202
1 94
129
1 03
1 972
1 973
1 9 74
1 975
1 9 76
1977
:J n
1978
1 979
1980
t
NUMBER OF SYNDI CATED LOANS ANN OUNCED
1981
1 98 2
1 98 3
1 984
OIL
EA S T
BLOC
NOE
NlC
LDC
37
49
95
78
.83
1 25
142
2 00
252
195
160
1 22
80
33
35
27
33
46
91
1 06
116
1 36
1 23
155
50
31
5
15
17
18
16
19
19
35
24
11
8
7
13
11
13
30
36
27
26
16
39
49
54
65
81
1 04
1 40
159
2 04
148
59
45
11
5
13
8
12
86
75
94
68
23
13
26
31
68
62
62
71
116
161
149
226
210
86
77
36
27
13
9
8
6
10
7
7
1
3
0
8
4
0
13
11
0
4
4
2
3
3
18
2
4
6
4
3
5
1
2
8
16
25
24
11
16
10
12
8
9
9
9
4
4
6
1
4
4
4
8
3
12
8
4
7
17
11
36
30
26
15
14
32
27
22
10
7
5
5
3
9
4
9
10
6
5
15
18
21
14
19
15
l4
6
18
22
16
22
6
7
10
10
3
3
6
6
ll
13
4
8
20
16
13
13
17
9
l
19
17
13
10
14
19
24
26
16
10
13
4
6
7
6
26
12
4
3
7
B
3
6
6
17
24
15
ll
17
12
10
23
35
21
22
47
25
15
25
26
4
6
5
4
4
7
15
15
21
20
33
22
34
22
33
34
34
41
22
31
31
22
5
5
4
5
8
26
26
33
28
48
55
45
52
37
34
28
17
ll
45
26
31
46
58
43
32
28
37
74
58
62
EXP
33
l
l
so
1
1
18
10
11
17
7
13
I NT
TOThL
INST
2
1
3
2
6
5
4
4
4
4
0
1
1
2
0
226
261
409
345
376
481
653
873
957
1 070
9 £. 0
484
376
0
64
52
49
61
0
0
3
2
0
1
0
0
44
60
86
71
10
16
12
11
2
4
0
2
l
0
99
128
99
83
17
4
ll
a
6
0
l
l
98
87
82
78
2
5
2
1
1
2
98
89
99
90
16
26
17
22
0
l
l
0
l
117
1 04
1 09
151
23
28
31
22
0
0
22
13
23
22
42
29
0
0
0
3
l
l
l6
21
25
24
so
38
40
33
34
37
39
30
12
20
20
23
36
34
37
42
29
17
25
23
47
56
64
59
44
59
45
4
50
60
60
40
41
59
31
17
2
0
6
1
20
30
9
9
0
0
9
5
3
26
14
24
22
18
14
19
3
8
1
0
1
0
18
22
20
17
12
15
12
6
3
0
4
l
7
7
10
7
7
3
7
8
7
7
52
47
66
50
58
29
58
30
20
33
40
6
52
57
45
40
51
36
35
30
36
37
48
34
2
1
33
37
25
28
18
26
33
9
15
2
3
2
33
36
8
0
6
31
32
21
19
20
20
19
21
10
4
2
4
3
3
6
9
6
OTH E R
2
3
0
4
4
3
3
16
3
l
0
0
0
l
1
2
7
1
6
5
0
0
l
37
1
32
42
48
l
0
l
8
0
56
1
2
4
1
7
2
1
2
2
2
l
l
0
2
0
0
6
0
0
0
146
150
201
156
230
224
224
195
240
226
227
264
258
254
264
294
2 54
286
239
181
1 32
113
125
114
1 01
1 06
94
75
TABLE 2 : VALUE OF' SYND I CATED LOANS ANNOUNCED
V S & m i l l i on
OECD
MJ
OIL
HIN
EXP
EA S T
BLOC
NOE
NlC
LDC
OTH E R
I NT
T OTAL
I N ST
1972
1973
1974
1975
1 976
1977
1 978
1979
1 98 0
1981
1 982
1 98 3
1 98 4
3219
8725
14486
2153
4374
7 999
1 5663
1 2865
20542
63849
23688
8 1 64
9296
1179
2625
5240
3901
4906
7785
1 08 8 3
1 4 399
1 94 1 9
1 56 6 9
18388
1 3577
5587
874
4131
1222
2849
4159
8 1 67
9608
1 1 3 05
1 2 980
12855
1 3819
5 5 24
3 5 04
98
985
1195
2045
1 587
2 1 94
2844
4220
2825
1075
512
548
2127
37 3
1 5 90
1894
2990
3353
3035
8596
9867
6958
1 1 00 5
12211
1 2 84
1025
903
930
2244
3323
3385
4618
9042
1 34 9 1
1 1 09 0
14735
11771
3531
3399
342
1211
2 1 56
1849
2985
3761
7331
7 7 07
7865
1 1 5 37
7433
3849
26 0 5
324
463
830
431
1071
12
150
3360
593
421
1438
402
804
120
1000
160
65
1665
1375
670
385
584
352
0
1240
125
7433
21660
29427
1 96 0 5
2 7 486
3894 5
64787
77599
82856
1 3 1499
89261
38120
2 84 7 1
1 972
1 7 74
26 3
620
561
287
132
303
457
1 86
181
254
253
35
0
63
0
170
0
87
116
26
141
76
660
42
95
112
93
50
167
82
25
1 20
0
0
0
2691
979
1 597
2165
1973
510
21 1 5
3513
2587
140
1 1 09
895
481
893
581
2203
454
105
430
400
so
1 00
26 5
485
740
445
58
254
173
190
2 00
480
341
0
0
163
300
0
1000
0
0
2 3 84
5757
8393
5 1 26
1974
961 3
2112
1723
1038
1 3 02
1 584
1487
866
500
265
210
248
155
620
l OO
320
235
882
349
427
457
737
476
574
750
823
221
362
2 00
285
28
317
lOO
0
0
60
13212
7408
4 5 94
4212
851
556
438
309
468
1071
984
1378
1 04
821
1 504
420
360
350
515
820
694
948
534
814
944
579
1116
683
389
454
736
270
1 06
0
l OO
225
0
0
25
40
3916
4780
5951
4959
1 976
1283
1334
8 24
434
399
2033
1237
1237
683
1 2 88
1717
471
265
785
162
375
819
665
542
1 3 28
265
704
999
1418
1 36 4
696
1 96
7 29
558
30
205
278
900
40
25
700
6 5 36
8074
5907
6969
1977
2415
1 927
577
3080
1 986
1937
7 06
3156
2 1 94
1359
2637
1977
325
451
543
875
SOB
10°0
771
1 2 02
1555
599
968
604
1 590
0
0
12
4 1 00
3242
5 1 66
3155
2375
281 1
3761
1936
2845
500
814
560
970
2145
0
1 822
2434
2196
1953
2009
3529
1 5 50
2 005
1917
2659
2 1 88
1212
1 9 34
2179
0
0
150
0
0
520
150
13827
20563
14473
1979
2790
2720
2881
4474
3020
3369
4 1 86
3823
2447
3335
3693
1830
1715
949
1 1 09
447
1973
3414
2162
2319
4315
3247
2715
3215
1731
1831
2055
2091
837
2332
190
0
125
0
160
100
18952
21197
19152
18298
1 9 80
4843
2411
2990
1 0298
4471
7020
2750
5179
2544
4365
3455
2615
657
526
792
851
864
1 90 8
2 3 54
1832
2652
2656
1895
3887
2 1 74
1467
1413
281 1
35
0
524
34
250
159
0
175
18490
2 05 1 2
16172
27682
1981
5 2 08
1 1 014
36268
1 1 359
4601
4482
1665
4922
2478
1 94 9
2903
5525
885
102
BB
0
3775
2 5 24
2 1 50
2557
3410
3764
3435
4 1 26
4 008
2 1 30
2180
3219
57
195
69
100
so
20
0
282
2 44 7 2
26 1 8 1
48757
3 2 08 9
1982
6671
6960
7576
2480
6546
5036
4144
266 2
3 591
3536
3714
2978
110
35
317
so
4 7 96
6442
2 54
720
3284
3829
2678
1 980
1 7 24
3182
1 480
1 04 7
410
605
3 93
30
1 98 3
1731
2253
1 595
2585
5350
2950
2 1 26
3 1 51
2278
1 689
547
1010
218
80
250
0
645
302
124
213
1041
930
1063
497
1614
576
1457
201
200
so
1 02
so
1 240
0
0
1 3076
10071
7 26 5
7708
1 96 9
3241
3121
965
1 5 27
1075
1854
1131
944
386
6 34
1540
510
500
577
540
163
569
183
111
1 1 00
796
949
554
669
744
490
701
419
210
175
0
0
125
0
0
7 3 01
764 5
7984
5542
1975
1978
1 98 4
No n - d o l l a r
amoun t • a r e conv er t ed
748
1 580
198
t o dol l a r s
at
0
lOO
500
50
725
0
0
0
0
0
9219
8661
7910
13155
1 5924
27132
29625
205 57
1 1 946
e n d -mon th e x ch a n g e r a t e s
TABLE:
3A :
RECENT
S b i l l i on
US
RE S C H E: DUL l NG S
OE:CD
HAJ
1 98 2
1 983
1 984
OIL
EA S T
MIN
E:XP
BLOC
1 . 00
1 . 12
. 36
11 . 32
9 . 84
4 . 24
1 . 92
.60
1982
. 36
1
1
1
1
N O E:
NIC
LDC
OTH E R
I NT
TOTAL
I NST
9 . 49
15 .68
12.17
2 . 30
1 4 . 04
12 . 12
. 04
3 . 03
4 . 34
16 . 43
46 . 99
40. 19
. 06
. 06
. 06
. 06
2 . 67
6 . 82
2 . 30
. 04
1 . 06
1 . 06
3 . 73
1 0 . 58
1 98 3
. 25
. 25
. 25
. 25
2 .83
2 .83
2.83
2 . 83
. 48
. 48
. 48
. 48
3 . 71
3 . 99
3 . 99
3 . 99
6 . 21
2.61
2.61
2.61
. 64
. 64
. 66
1 . 09
14 . 12
1 0 . 80
10 . 82
11 .25
1984
. 28
. 28
. 28
2 . 46
2 . 46
2 . 46
2 . 46
. 15
.15
.15
2 . 97
3 . 07
3 . 07
3 . 06
3 . 03
3 .03
3 . 03
1 . os
1 . 08
1 . 08
9 . 97
1 0 . 07
10 . 07
3 . 03
1 . 10
1 0 . 08
. 28
3 B : RE CENTLY
£ b i l l i on
TABLE:
US
O E: C D
HAJ
1 98 2
1 98 3
1 98 4
. 15
S YN D I CATED
OIL
MIN
E XP
. 60
.43
" NEW MONEY '
EA S T
NOE
BLOC
LOANS
NIC
LDC
O TH E R
I NT
TOTAL
I NS T
. 30
. 20
. 20
5 . 00
4 . 25
5 . 90
6 . 50
4 . 20
. 30
5 . 00
5 . 90
1 . 54
1 .83
1 1 . 20
1 3 . 52
6.23
1 9 82
1 983
. 60
.45
.43
1 1 . 20
. 24
1 . 29
1. 30
1 .73
. 20
1 0 . 30
. eo
.eo
.11
. 31
5 . 12
. 20
3 . 80
6 . 50
1 98 4
. 20
4 . 20
. 92
TABLE 4 : ��T I ST I CS OF LOAN S I Z E D I ST R I BU T I ON
US S m i l l i on ( e • c ep t G i n i coe f f i c i e n t - pe r ce n t )
NO OF
LOANS
-- QUART I LE S -QTL 3
RANGE
OTL l
----- DEC I LE S ---DECl
DEC9
RANGE
M ED I AN
MEAN
GINI
COEFF
1972
1973
1 9 74
1975
1 9 76
1977
1978
1 979
1 9 80
1981
1 9 82
1 983
1 9 84
226
261
409
345
376
481
653
873
957
1070
960
484
376
10
18
15
16
16
18
20
20
20
20
20
19
15
35
65
75
so
80
75
1 00
1 00
85
1 00
100
74
75
25
47
60
34
64
57
eo
80
65
eo
80
54
60
5
10
10
10
10
10
10
11
10
11
10
10
8
61
2 00
150
150
200
200
2 50
2 00
2 00
237
200
2 00
199
56
190
1 40
140
1 90
190
240
189
190
226
190
190
192
20
30
33
30
30
33
so
46
40
46
45
31
30
32.9
83 . 0
71 .9
56 . 8
73.1
81 . 0
99 . 2
88 . 9
86 . 6
122 . 9
93.0
78 . 8
75. 7
56 . 1 0
65 .62
61 . 5 2
56 . 29
61 . 3 0
63 . 17
61 . 74
59 . 34
62 . 5 8
69 . 34
62 . 1 1
63 . 3 7
63 . 74
1972
64
52
49
61
10
6
10
12
35
26
30
40
25
20
20
28
6
3
7
8
80
40
82
64
74
38
76
56
18
13
20
22
42 . 0
18 . 8
32.6
35 . 5
63.17
4 7 . 96
5 2 . 29
50 . 1 9
1973
44
60
86
71
10
15
20
20
50
1 00
100
61
40
85
80
41
7
10
10
10
200
200
200
1 50
1 93
190
190
140
20
25
40
35
54 . 2
95 . 9
97 . 6
72 . 2
60 . 4 2
68 . 6 5
66 . 8 6
60 . 3 3
1974
99
128
99
83
20
20
15
15
100
80
so
75
80
60
35
61
10
10
10
10
300
1 50
1 00
130
290
140
90
1 20
so
36
29
30
133. 5
57 . 9
46 . 4
50.7
71 . 7 7
4 7 . 90
53.77
5 0 . 49
1975
98
87
82
78
15
13
20
19
40
70
60
60
25
57
40
41
8
9
10
10
100
150
200
150
92
142
190
1 40
23
30
30
30
40 . 0
54 . 9
72.6
6 3 .6
52 . 22
52 .87
5 9 . 00
5 5 . 07
1976
98
89
99
90
20
15
15
16
80
1 00
55
70
60
85
40
54
11
10
6
10
175
250
140
216
164
240
134
2 06
30
32
28
35
66 . 7
90 . 7
59 . 7
77.4
57 . 56
63.13
61 . 5 3
5 9 . 98
1977
117
1 04
109
151
14
20
20
20
60
1 00
66
77
46
80
46
57
8
12
12
11
150
200
150
250
142
1 88
1 38
239
25
40
30
40
78 . 8
83 . 3
72.6
87 . 1
70.02
57 . 10
61 .61
61 . 39
1 978
146
1 50
201
1 56
20
18
20
20
100
100
100
1 00
82
80
eo
10
10
10
12
250
250
250
250
240
240
240
2 38
so
40
50
50
1 09 . 1
92 . 2
102 . 3
92 . 8
62 . 73
61 . 99
6 3 . 78
56 . 8 7
1979
230
224
224
195
25
20
21
20
100
1 00
1 00
eo
75
eo
79
60
11
10
12
11
200
200
2 00
250
199
190
188
239
50
so
50
40
82 . 4
94 . 6
85 . 5
93.8
54 . 7 7
60 . 9 2
56 . 68
64 . 3 1
1 9 80
240
2 26
227
264
20
18
16
20
78
75
90
100
58
57
74
80
10
10
10
10
2 00
250
200
250
190
2 40
190
240
32
40
31
47
77. 0
90.8
71 . 2
104 . 9
6 0 . 08
6 3 . 55
58 . 2 7
6 5 . 32
258
254
264
294
20
20
20
24
104
95
85
1 10
84
75
65
86
12
10
10
13
211
200
250
2 50
199
190
240
2 38
50
40
40
50
94 . 9
103 . 1
1 84 . 7
1 09 . 1
57 . 80
68 . 2 6
1 98 2
254
286
:2 3 9
181
21
20
20
20
100
100
87
88
79
80
67
68
10
10
10
10
250
250
150
1 50
240
240
140
140
so
50
35
43
1 06 . 8
103 .6
86 . 0
66 . 0
62 . 92
62 .87
63 . 75
51 . 7 3
1983
132
113
125
114
18
20
19
20
eo
50
55
82
60
31
35
10
11
10
8
250
200
150
1 20
240
189
140
112
31
40
30
30
99. 1
e9 . 1
58. 1
67 . 6
6 7 . 06
6 2 . 22
56 . 2 7
6 1 . 98
1 01
106
94
75
15
18
12
18
77
90
65
75
62
73
54
57
8
10
7
9
175
150
180
2i8
167
140
173
2 19
29
30
24
36
72. 3
72.1
84 . 9
73.9
62 . 3 1
59 . 0 1
71 . 90
58 . 5 7
1981
1 9 84
l OO
i, O
79 . 91
60 . 6 8
TABLE 5 :
Per cent
C U R RE N CY
us
DLR
1972
1 97 3
1 9 74
1 97 5
1 976
1977
1978
1979
1 98 0
1 98 1
1 982
1 983
1 98 4
90 . 1
99 . 2
98 . 3
96 . 7
97 . 0
96 . 9
98 . 0
96 . 6
96 . 5
95 . 1
94 . 3
90 . 6
86 . 0
1972
78 .6
96 . 6
93.9
98 . 6
1973
1974
1975
1 9 76
1977
1978
1 979
1 980
1 98 1
1 98 2
1 98 3
1984
98 . 1
99 . 5
98 . 8
99 . 8
OF
D E N OM I NA T I ON
CAN
DLR
• 3
.o
.
.
.
.
2
5
2
1
DM
1 .4
.6
1.3
2.4
2.8
2.4
1 .4
2.6
1 .5
1 .2
.6
1.0
1 .6
.7
. 1
.
.
1 .
.
1
2
2
2
.
.
.
.
98 . 1
98 . 7
92 . 4
97 . 8
1
1
7
1
.9
.2
.6
.5
93
97
98
�8
6.2
.8
2.0
1 .0
.4
.3
.0
.5
7
9
7
1
99 . 1
97 . 8
97.9
97.4
.
1 .
1.
1 .
94 .
98 .
96 .
96 .
5.0
.9
2.4
2.3
6
3
5
5
.4
.6
.8
.8
98 . 3
93 . 4
93.2
89 . 6
95 . 5
94 . 8
83.0
84 . 0
85 . 1
90 . 7
87 . 0
79 . 1
Ot h e r OECD :
Comp cu r r :
M i d d l e Ea s t :
Far E a s t :
.2
.8
1 .4
.3
.8
.1
FR
OTH E R
COMP
M I DDLE
FC
OE C D
CURR
£AST
.o
.2
.3
.o
.o
.1
.5
.3
. 4
.6
.5
.2
.4
.2
.2
.6
.o
.2
• 2
.3
• 3
. ..
.l
.1
2.3
3.4
.9
.4
.e
5
.8
•
.1
1
•
.0
.1
.2
.1
.3
.o
.2
.o
1.1
.4
2.1
7.9
.1
• 3
• 3
.2
.3
1 .7
.2
1 .0
1 .4
.4
. 1
.
.2
.3
.5
l
.3
. 2
.1
1.0
.1
.4
.4
1.9
.o
.1
.7
.3
1 .0
.1
.8
.1
9
9
3
5
2.2
.6
3.9
• 3
FAP
£AST
.4
.o
.2
.8
1 . 3
4.9
3.1
1
5
0
2
96 . 9
96 . 5
97 . 3
96 . 0
SW
Fe
1 .6
.2
.1
5.2
1.1
.8
2.3
2.3
.1
94
96
96
91
6.3
.0
17.4
99 . 0
97 . 1
97 . 0
99 . 8
96 . 6
95 . 7
95 . 0
97 . 8
STG
.4
.7
. 1
.6
.6
.2
.4
. 5
• 3
.5
• 2
.8
.2
.4
3
.4
.3
3
.7
.3
.4
. 1
.3
.2
.3
.0
.1
.4
.9
1.5
. 1
.9
3.3
1.3
. 1
.4
.2
1 .4
.1
.0
.o
.3
.5
.4
.8
2.4
.5
1.5
1 .2
1 .0
.7
1.9
12.3
8.9
.7
• 5
.1
.3
.4
3
.7
1.2
2.6
.6
2.7
.1
2.0
4.2
2.9
.2
.5
.4
.9
1.2
.4
.7
1.1
3.5
0
.1
.3
.4
2.7
.5
.7
.3
.7
.3
1
4
1
5
.4
.3
.1
.7
•
.
.
.
2.
.
. 1
1.1
•
. 1
.1
.3
1.8
.6
.9
1 .6
1
.4
.3
.2
.1
1.2
•
Be l g i a n F e /Lu x embou r g F c / G u i l d e r / Swe d i sh
S D R ( l 9 8 1 ) / E CU ( l 9 8 0 , 1 9 8 2 - 4 )
K u wa i t i D i n a r /UAE D i r h a m / S a ud i R i y a l
Y e n / Hong Kong Do l 1 a r / S i n g a por e D o l l a r
1 .8
.7
1 .6
2.4
.6
1.5
4.0
.4
.
6
.1
.2
.5
.4
.9
3.5
.6
1.1
•
.1
3
.5
9.0
2.9
6.3
15 .3
.7
K r / N o r w e g i a n Kr / Au s t r a 1 i a n Do l l a r
T .\l! Lt 6 : HI:.AN SYNDI CAT I ON T I M E S
Mo n t h a
OECO
"""
LDC
OTH E R
2.2
1 .7
1 .8
.5
.8
2.1
2.2
1 .7
1 .7
1.7
1.4
o
'
·
.5
2.0
1 .9
2.5
2.5
2.1
4.0
6.8
2 .7
2.0
OIL
BLOC
1 980
1981
1 98 2
198 )
1 984
1
1
1
1
1
.2
.0
.6
.6
.6
2.1
2.0
2.0
1.9
1 .0
3.8
2.1
1.6
1.5
1.3
2.0
1.8
1.2
1.1
2.3
1.9
2.4
1.6
1.5
1.0
2.3
2.7
1.5
1.5
1.1
2.4
2.6
1.7
1 .8
1.7
1980
1.2
1.5
1.5
1 .0
1 .7
2.8
1.5
1.8
2.5
2.4
5.0
6.2
3.1
1.8
1.6
1.7
1 .6
1.5
2.0
2.3
2.1
3.3
3.0
1.6
2.4
2.4
2.3
2.5
2.5
.3
2.0
1.6
.6
1.4
2.2
1 .8
1 .6
2.3
2.1
2.7
2.7
1.6
2.0
1.0
1.1
2.7
2.7
2.1
1.7
4.4
2.3
2.2
2.0
3.3
2.2
2.5
2.1
1.1
1.9
1.5
1 .6
1 .9
1.7
1.4
1.5
2.5
1.8
2.2
1.2
1.6
1.6
1.2
1 .6
1 .7
2.0
1.2
.3
1.9
1.6
1.1
2.1
1.3
1 98 3
2.1
1.5
1 .4
1.3
1.9
1.9
1.9
1.8
1.5
1.9
1.3
1.1
1.3
1 .7
.8
1 .6
2.1
.8
1.1
1 .8
1.3
1.6
1.3
1.5
1 .7
1.9
3.4
.6
.4
.5
-�
1 984
1 .7
.7
1 .6
.5
.9
.8
1.3
1 .0
2.3
1.1
1.0
1.1
2.9
.9
.7
1 .4
1981
1982
Th e a e Cl a t a
TOTAL
I N'l'
I N ST
NIC
£XP
EAST
NO!:
MIN
.o
.
l .O
1.5
are
pa r t i cu l a r l y a u a c:ep t i � l e t o r e v i s i on for
2.0
1 .7
1 .6
1.3
1
1
1
1
.8
.7
.6
.5
1 .4
.9
2.2
1.5
2.3
1 .7
1 .7
r e c:e n t q ua r t e r •
7 : E S T I MAT E D D AA WDOWN OF S Y N D I CAT E D LO.IV\S
us ' m i l l i on
T�LE
OECO
1972
1973
1 9 74
1975
1976
1977
1 978
1 979
OIL
EAST
MIN
EXP
BLOC
802
2521
4855
3461
5830
5931
1 1 806
1 24 3 7
18185
18057
19728
1 2 365
6834
651
3887
1442
2676
3 7 08
661 7
1 02 5 9
1 0 797
98
935
925
1755
2022
MAJ
2658
6699
16035
3 1 08
4090
5757
1 E> 5 7 8
1 1 898
1 98 0
1 9 81
1 98 2
1983
1 98 4
1 7757
64081
1972
696
1 1 09
2851 2
7307
9588
243
610
1973
1 9 74
1975
1976
1977
1 978
1979
1 9 80
1 981
1982
569
541
2 2 76
3313
232
40
143
387
38
266
94
254
3 99
!> 5 9 5
8030
1 09 0 8
1 27 76
1971
947
1 1 09
895
20
85
4 30
400
50
230
545
265
485
93
190
2 00
480
25
0
0
163
740
340
777
349
173
512
682
476
251
1190
473
221
300
200
285
28
362
4 38
591
710
317
106
0
649
9 04
lOO
1 2 26
510
679
693
1 084
264
993
1 1 20
248
204
71 1
1514
447
924
1 0 54
602
916
622
661
1 225
928
1 2 88
649
1 447
314
2401
1669
3 20
360
400
67 5
S89
1 207
374
1 5 39
830
510
320
362
730
799
475
552
1 1 68
38 5
8 04
1 259
2 4 64
1451
1 06 9
7 74
1 6 66
984
1667
1614
2231
89 2
2037
1458
225
2 94
1 4 08
558
798
1410
885
3527
4935
4 3 86
3 7 30
3 2 06
2461
2651
3488
4099
1 393
1935
2833
1 4 28
2271
2687
3 2 48
3692
2 1 86
2760
4 288
3203
2067
2098
3320
3312
S043
2830
3517
6366
S562
4 3 99
4761
3464
98 3 3
4317
3 9 1 S4
10777
8036
6543
620
893
914
1634
79
60
6971
4 5 94
5118
3407
46 1 7
6 00
2331
2013
1475
2212
2645
2061
2 1 88
4553
6 0 00
S 7 24
291 7
34 1 5
1854
33 80
772
7137
745
S35
90
so
1 8 26
2185
4468
2429
3825
5707
S667
4 S 30
2007
4460
3245
3 7 08
0
3S
317
8 04
266 1
1879
1 963
2362
4987
2591
2425
4678
1 60 7
1023
268
65
265
0
1 58 0
1977
2910
3121
2894
667
1033
2240
922
1 39
34 1
634
lOO
600
0
175
0
soo
170
17351
14787
14622
1 8598
S37
2362
125
0
0
160
1 54 5 7
16691
22402
18152
3 240
1479
1 7 64
1973
335
0
30
452
1 00
409
0
25
22762
16321
1 6 76
300G
4042
4 384
2823
2842
2074
3147
66
118
1 50
50
0
0
1 799
7220
3453
305
3532
392 2
2956
2487
2507
2328
2595
1 3 92
24973
22156
5 3668
3 1 504
410
250
302
355
393
0
0
0
22368
30590
2 3986
2 1 384
811
707
214
240
2 3 14
1 51 7
261
1 278
1 8 54
1028
1 406
Sl4
230
25
127
so
0
0
13322
1240
0
33
390
851
7 96
969
117
738
651
790
0
0
419
210
175
0
125
0
1631
135
663
375
soo
S77
69
1 83
1443
1632
2 2 26
1 07 5
1 50
160
150
1 64
1972
deta i l s
0
12
0
0
0
705
440
600
1 1 48
a i n ce
l OO
5 8 36
1 2952
10215
6385
7776
8467
2801
2690
3728
3171
for
0
0
7 00
1 8 05
37
2 1 46
2332
5918
8180
240
0
0
0
2153
announce�
0
0
1 00 0
0
3 98
712
661
1 162
571
672
2187
4086
2340
4080
l oa n s
1289
1658
823
1 6 08
7617
S190
6888
6946
2843
1 3 37
3 7 84
1 10
60
60
0
0
300
40
625
0
147S
1 380
8 34
840
414
810
22
120
5377
1 0 00
1 8 5 7(,
1 00
3u354
125
19595
9 (, 5
2664 1
1475
328 4 3
1270
6 5 3 58
285
7 2702
534
8050&
200 1 3 2 3 0 1
302
98328
1 2 40
42517
125
27224
425
3 58
30
244
1 6 88
1 769
Se c t i on V pa g e
TOThL
64 5 3
2 0 84
1110
1919
3910
1122
l ,.,.
0
0
65
7 08
2670
1 3 74
2025
450
12
3210
817
497
1408
432
804
7 00
405
58
254
l OO
240
813
523
1 057
240
1 55
82
116
632
299
1 88
l OB
210
525
253
249
963
2 1 35
2101
2797
2932
6532
7 2 58
84 5 5
1 0886
8823
4802
2 2 9 (,
40
1 3 04
1487
1 282
OT H E R
42
20
26
91
50
76
50
30
57
63
223
893
581
2 1 90
1843
2939
36 1 6
4 3 26
902 3
1 2 6 94
11447
1 3 1 07
1 2897
5370
3006
1 20
35
0
0
118
24 3
141 6
454
Ba a e � o n
See
2036
257
966
2 2 06
2907
2556
4 1 74
6776
7 81
82S2
1 9 84
1 3143
1 3420
8430
LDC
I NST
1 391
3 1 02
4528
2892
1420
46 2
598
1 587
NIC
3087
867 3
2552
1723
5681
1 98 3
1 2391
NO£
of
m e t h od
used
in
e a t i 111 a t i on
1 8062
23363
1 2 596
9007
7593
6071
5828
66 34
8690
TABL� 8 : E S T I MAT�O JU:PAYMI:t."T S OF SYNDI CAT�O LOANS
us • a i l l i on
O'n! � R
J NT
TOTAL
J NST
7
61
262
523
958
1 4 26
1965
2512
2806
3657
44 32
4723
4968
5
54
109
2 38
)79
531
511
543
1 08 8
1 0 00
940
1 2 38
898
12
24
1' 7 8
221
267
512
668
722
683
582
479
433
252
1242
uos
7877
11687
1 6 1 20
20640
26H9
3 2 9 48
u oso
54992
62479
58239
0
0
2
7
0
0
6
1
0
0
4
2
0
0
6
6
0
0
108
144
9
10
17
15
6
11
51
35
14
6
23
18
16
10
19
10
6
6
6
6
177
294
324
447
39
38
41
52
33
34
81
51
54
49
63
75
37
43
51
131
19
17
41
32
83
6
83
6
660
951
1 0 36
1758
1 09
298
121
314
79
59
1 08
88
120
75
155
135
99
1 06
1 90
149
88
145
107
184
62
36
95
46
90
6
120
6
1481
2098
1 9 36
2362
411
403
496
433
191
454
245
556
146
151
227
202
218
225
285
288
242
213
345
251
160
234
267
298
95
56
139
89
120
13
1 20
15
2349
2949
2986
3403
922
1331
956
1 349
691
579
721
659
278
666
440
729
2 59
238
278
264
329
37 2
422
us
408
382
490
470
321
366
311
428
1U
110
168
109
188
15
252
57
3540
4059
4038
4482
997
793
753
1 006
879
539
839
784
907
319
291
416
293
479
540
517
606
561
579
664
619
361
510
486
609
1 56
101
1 54
101
252
60
295
60
44 5 5
5 0 06
5467
5712
899
943
1274
417
331
4 34
368
565
738
717
805
774
749
815
860
513
699
588
712
152
101
150
141
295
62
304
62
6 184
6 34 6
6694
7035
3 96
1 54
392
145
3 04
62
232
85
7722
7753
9008
846 5
o�co
OIL
E XP
L\ST
BLOC
NO�
NIC
LOC
MIN
1 59
603
2031
3511
4 1 02
4557
5121
6470
7432
1 0 2 08
1 7 5 58
19755
19212
22
154
537
1 1 80
1 742
2649
34 3 2
4271
5112
6876
7485
9212
9932
24
169
679
841
1446
2114
3069
4 1 68
7182
9037
1 1 253
10847
7043
4
25
170
332
726
1039
1 3 09
1 5 50
1 598
1542
1677
1964
2331
10
51
199
485
1016
1 5 40
2141
2825
3462
3927
56 1 7
7970
6135
9
102
240
545
1050
1751
24 2 3
3 1 97
3586
4221
5552
6460
7 286
1972
0
0
58
102
0
0
19
3
0
0
4
20
0
0
4
0
0
0
7
4
1973
82
175
1 22
223
29
31
54
40
11
40
27
90
4
5
5
11
1974
217
430
419
965
1 17
86
165
169
62
247
93
27 7
1975
589
1 095
711
1 1 28
249
289
330
311
1976
768
1 201
863
1 27 1
1977
""'"'
1 972
1973
1 974
1 975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1979
1 343
1 1 44
1637
lll
1428
1 694
1 5 48
1 8 09
1142
931
1 1 94
lOOS
1630
1845
1 914
2043
1 292
1 024
1 6 46
1150
1 38 3
1 780
1995
2024
429
380
422
367
8 34
863
861
904
852
864
958
602
7 34
681
788
1981
2 3 84
2393
2946
2486
1985
1 2 27
2 2 04
1459
2030
2381
1773
2853
382
381
3 96
384
849
1082
90S
1091
916
1105
992
1207
7 33
929
993
1001
391
1 36
355
117
232
82
185
82
9902
9716
10749
10682
1 982
5312
3 1 70
5661
34 1 5
2112
142 1
2120
1833
1 4 88
3939
1768
4058
4 26
379
487
384
1 09 3
1 193
1028
2303
1 1 29
1453
1 36 3
1 6 07
1023
1 1 84
921
1 303
350
124
) 54
111
182
82
132
82
13116
1 2946
1 38 3 4
1 5 096
1983
6039
369 5
6179
3841
2383
2098
2 4 26
23 1 5
2634
3044
2810
2 3 58
476
447
580
4G2
1 6 85
2 1 67
2325
1793
1519
1 59 7
1603
1741
1 1 06
1 1 90
1 307
1 1 20
422
172
4 36
207
"
73
"
79
16343
14474
1 7 7 46
13917
1 984
6033
3899
5633
3647
2 397
2522
2SSS
2458
2 1 34
1 4 94
1 96 5
1449
571
499
6 54
609
1 390
17 71
1 377
1 5 97
1 7 34
1823
1782
1 94 7
1 342
1112
1330
1 184
409
166
1 66
157
1 27
68
127
110
16137
1 3 3 54
1 5 5 90
13159
1 97 9
1 980
....
f oo t n o t • •
1052
t o ta 'b 1 e 7
911
TABLE 9 :
E S T I MATED NET SYNDI CATED LEND I NG
us • 11 i 1 l i on
OECD
HAJ
1972
1973
1974
1975
1976
249e
6 096
1 4 004
-403
-12
1977
1 2 00
11457
1 97 e
542e
1979
19eo
10325
53e73
1 9e1
1 0 9 54
1 9e 2
19e3 -1 2447
- 96 2 3
1 9e4
1972
696
1975
1976
1977
197e
1 97 9
1981
1 9e 2
1983
1 9e4
See
EAST
BLOC
NOE
NIC
LDC
7eo
2367
431e
22e1
40ee
32e2
e374
627
371e
763
1e3s
2262
4502
7 1 90
6629
520e
4 1 07
2166
-2417
- 5 007
95
910
755
1423
1 2 96
352
1793
297e
247
916
200e
2422
1 540
2634
4635
6770
234
1314
1602
2 3 94
2567
2575
6600
1 2 94
456e
-122
-1 2 1 4
69e1
7160
-5999
-51ee
e166
1 3073
1 1 1e1
12243
3153
-309e
509
487
366
2153
3090
370
e8
1 0 54
es6
212
e53
5 54
233
2 1 00
- 1 3 66
-744
O'ni E R
I NT
TOTAL
I N ST
242
902
1e73
1577
1e39
1 5 07
4566
4747
294
1 34
704
2e5
677
-,2 9 1
1 0e
976
-7e
-96
69e
96 3
602
5649
7230
-271
- 5 03
46e
-4 3 7
-149
-3e2
-177
-e06
929
-42eo
eo
- 26 7 2
-94
- 3 oe
- 1 99 6 3
-31015
9496
7e62
eee7
7 34 5
- 1 090
26
42
40
60
1 2e9
91
48
70
20
102
7e
22
60
151
e1
-6
-6
16Se
715
1464
17
eo
425
3e9
107
90
248
471
6 94
394
7
219
79
184
177
462
9
-10
-19
-6
-6
994
-6
1969
2039
5 5 94
7733
119
463
619
401
214
281
1e3
244
-4
-83
5176
-6
12002
17
-6
5935
2e36
255
70
-95
54
-30
-6
-120
59
1 3 10
2681
4091
3 30
302
1eO
664
392
11
707
2133
7 58
1 92
1 140
27e
160
1 31e
306
696
-67
6 3e
-575
-32
-4 3 5
835
-25
663
808
1 39
-93
590
1 1 99
397
753
504
4e
242
301
299
3 2e
849
465
274
781
432
512
294
484
526
684
512
927
744
172
4 59
1 0 08
416
292
587
1 0 36
-90
1 9 05
129
-622
359
93
1237
983
1 60
575
1 89
264
1541
975
1952
-34
1 0 80
121
113
405
946
225
1 5 96
-575
56
354
956
728
-24
186
376
992
477
511
4 23
1 164
2531
3592
3 242
2093
2413
3 560
1 1 10
2 29
1 7 08
1645
554
1 1 51
169
-2
2130
2609
1925
517
1418
1 0 5e
1049
3 99
472
1 1 68
1046
1699
3 09 4
2 1 98
2377
3414
985
1603
4323
4270
1418
3375
3115
2313
910
1732
1 1 48
7 4 49
1925
3 6 208
8 291
401 5
4497
-176
999
713
1 956
- 1 00 1
42e4
2723
1713
3373
20
4e37
42e6
3 5 47
519
521
1477
-350
-5235
-1035
-4 300
-1e7e
-2 1
2 e ') 9
164
110
-44 53
-1922
-2722
-526
497
-1e5S
-1522
-21e
footnotes
26 9 7
to
2038
422
90
495
4 56
1044
1147
955
-2 7 3
4 26
1 e29
4 3 336
so
23
54
1 1 96
843
4 7 56 0
91252
120
2870
1003
4391
-499
2666
5125
1 7 3 34
2 5 949
1171e
14954
16724
4471e
46444
35
0
-4
63
8243
1883
1 980
OIL
3e
266
90
1e5
1974
E XP
232
40
1 24
384
1109
1973
MIN
304
374
153
- 1 09
154
77
95
346
-110
350
- 1 68
7 34
- 1 09
1523
1 3 27
- 1 44
531
1255
3291
1259
956
1024
-101
- 1 54
227e
599
3067
826
1413
3337
1640
-2
1 106
437
1 5 26
1637
3 2 20
363
2212
19
276
60
178
781
1496
1793
1150
614
1150
1 323
1 3 08
3595
2638
745
1082
1 184
363
977
1103
857
-101
2e
SOS
-15
3636
526e
2241
3902
3543
512
585
-252
1 1e
66 7 5
348
-60
1 2 e96
205
110
2325
3738
3985
97e1
9155
1 2 886
-170
-62
- 3 04
98
1 1 1 1e
-61
-154
-362
307
- 2 04
1 5040
347
-232
-60
8568
9054
14e98
-82
-32
15071
1 2440
-185
42919
-e2
20e22
9273
10345
1 5 7 08
7 60
20e9
3563
1 9 00
3 0 50
1912
1 0e2
133e
3177
2 146
- 3 26
-19
-205
47
-316
706
2403
1 4 84
- 1 00
-452
6027
2424
1 144
1674
2e6
-82
1 7644
-66
-199e
2469
1 593
eeo
1 20
9252
-379
1
- 1 32
89
282
-82
1 01 5 2
6 2e8
-874
-1460
-21 1 1
7 95
-eo
-1342
-463
749
-162
-192
-147
-3021
-le7e
99
-606
- 79
-73
- 1 2 36
- 2 oe
-382
-315
-462
- 3 09
-157
1 161
-e7 3 9
-6 3 2 4
-1212
-1356
-16 25
-436
-124
- 1 54
- 1 3 57
- u oe
-31
-1414
-1225
-374
-679
- 3 94
- 4 09
253
44
18
- 1 27
-6e
-el5
-1 344
-972
- 9 e6
-97e
2044
-1437
- 1 7e7
table
7
1 54
-305
-334
-1 5 5 3
- 1 309
-79
-2
-110
- 1 00 6 6
-7525
-e955
-446e
TABLE l 0 1 E S T I MATED STOCK OF SYNDI CATED LOANS OUTSTAN D I N G
us i b i l l i on a t e n d - pe r i od
OECD
MAJ
1972
1973
1 9 74
1975
1976
1 977
1978
1 97 9
1 980
1981
1 982
1983
1 9 84
1 972
1973
1 974
1975
1 9 76
1 9 77
1 978
1979
1 980
1 98 1
1 9 82
1 98 3
1 984
EAST
BLOC
NOE
E XP
.8
3.1
7.5
9.7
13.8
17.1
25 . 5
33.7
46 . 7
57.9
70. 2
73 . 3
70 . 2
.6
4.3
5.1
6.9
9.2
13.7
20 . 9
27 . 5
32 . 7
36 . 8
39 . 0
36 . 6
31.6
.1
1.0
1 .8
3.2
4.5
4.8
6.6
9.6
10 . 9
10.8
9.6
8.2
7.5
.2
1 . 2
3.2
5.6
7.1
9.8
14 . 4
21 . 2
25 . 7
32 . 7
39 . 9
33.9
28 . 7
.7
1 .8
.2
3
.o
2.0
2.5
.4
.8
.4
.6
.o
.o
2.5
8.6
22.6
22.2
22 . 2
23.4
34 . 8
40 . 3
50 . 6
1 04 . 5
115.4
103 .0
93 . 3
•
NIC
LDC
.2
17 . 3
26 . 8
34 . 6
43.5
50 . 9
49 . 8
.2
1 . 1
3.0
4.6
6.4
7.9
12.5
17 . 3
22 . 9
30 . 1
34 . 5
34 . 6
45 . 5
.1
.0
2
.0
.1
.8
1 .7
2.2
4.3
.1
.2
.6
1 .0
.4
.7
1.2
.7
1 .0
1 .9
1 .7
.0
.2
.1
1 .2
1 .7
2.2
2.9
3.2
2.1
2.7
•
3
TOTAL
.1
5.1
22 . 5
48 . 4
3.2
2.7
2.6
2.2
2.0
3.0
31 . 9
1 . 3
. 4.0
3.7
3.2
3.7
2.9
2.8
.0
.1
.o
.1
1.3
. 1
. 1
.1
2.9
.2
.2
.2
• 2
.2
• 2
.2
.3
.1
.1
3.7
5.1
.4
.9
1 . 3
3
.3
.1
. 1
7.1
3
.4
1 . 1
1 . 1
•
1 . 1
11.5
19.7
21 .8
22.6
3.8
6.1
7.5
4
5
5
5
23.2
8.3
5.2
2.0
22 . 7
22.6
22 . 2
8.3
8.9
9.7
5.2
5.7
6.9
2.3
2 .6
3.2
7.3
8.1
3.9
4.2
6.1
6.7
8.2
1 .8
I N ST
1 . 1
1.0
.9
1.6
2.6
1 .2
5.0
HIT
3
3.0
2.3
3.1
On! ER
.4
.1
.4
.1
.8
3.4
5.5
8.6
1 . 5
3.2
5.5
8.1
10.7
•
1
1
2
1
.3
•
. 5
.7
1 . 1
•
3.2
1 .4
2.5
2.9
3.0
.
.
1 .
1 .
3.5
4.1
4.3
4.8
5.6
4.6
5.0
5.5
1 . 3
1 . 5
2.6
60 . 1
75.1
91 .8
1 36 . 5
183 . 0
230 . 5
321 . 8
365 . 1
345 . 2
314 . 1
9.1
14.7
22 . 5
7
1 .0
9
1
1
1 .0
1 .0
1 .0
27 . 6
39 . 6
45.6
48 . 4
3.3
1 .4
1 .0
52.0
3.6
4.1
4.6
1 . 5
1 .4
1 .4
1.0
53.4
56 . 0
60 . 1
6.5
6.6
7.1
5.3
5.8
6.1
1 .7
2.0
1 . 1
8.1
6.4
6.
6.
7.
7.
22.7
10.8
22.4
22.8
10. 7
12.6
22 . 2
13.8
9.2
4.3
4.5
6.9
7.1
23.7
23 . 8
14.8
15.2
11.2
11 .4
4.4
4.5
8.2
8.4
8.6
9.1
24 . 0
23 . 4
16 . 2
17.1
13.0
13.7
4.9
4.8
8.8
9.8
9.5
10 . 7
25 . 9
19.5
17 . 3
5 .9
10 . 0
29 . 5
21 . 2
17 .8
6.1
12. 1
32.7
22 . 9
19.0
6.1
13.0
34 . 8
25 . 5
20 . 9
6.6
35.7
36 . 7
26 . 5
22.1
28 . 4
23 . 1
38 . 4
40 . 3
31 . 5
33 . 7
25 . 5
43.7
44 . 7
46 . 3
.9
.9
1 . 1
1 .6
65.4
67 . 6
71 . 5
1.6
75.1
2.2
2.1
2.1
2.7
9
1 .9
1 .8
2.6
81
84
87
91
12.2
9.3
1 .7
2.9
1 04 . 7
12.7
10.5
1 .6
1 14 . 5
14.0
11 .5
14 . 4
17 . 3
12.5
1 .4
1.3
2.9
3.1
3.2
1 36 . 5
7.7
16 . 7
18 . 7
14.1
17 . 3
22 . 0
15 . 3
2.9
145 .8
156 . 1
27 . 5
20 . 3
21 . 2
23.6
26 . 8
16 . 9
17 . 3
1 . 3
1 .7
4.0
4.0
3.0
8.7
9.1
9.6
2.6
2.7
171 .8
183 .0
37 . 9
41 . 3
28 . 9
9.9
22.7
28 . 6
29 . 9
9.9
29 . 7
19.9
20 . 6
3.9
3.8
2.5
2.9
206 . 6
31 . 6
10.1
31.0
21 . 7
32 . 7
10.9
25 . 7
34 . 6
22 . 9
3 .4
3.7
2 .6
50.6
44 . 4
46 . 7
23 . 8
24 . 4
5
9
2
1.9
2.1
2.5
.8
.1
.8
.8
123.6
1 98 . 0
2.6
215.6
230 . 5
245 . 6
58 . 0
50 . 7
32.6
11.3
26 . 7
35.4
25.0
3.4
2.5
60 . 0
55 . 2
33 . 6
11 .4
27 . 8
37 . 3
26 . 9
3.4
2.5
2 58 . 0
96 . 2
56 . 0
32.6
11.1
31.4
40 . 4
28 . 0
3 . 1
2 . 3
301 . 0
1 04 . 5
57 . 9
36 . 8
10.8
32 . 7
43 . 5
30 . 1
3.2
2.2
321 .8
1 07 . 2
59.6
63.9
37 . 4
37.9
10.5
10. 1
33.4
3.1
39 . 5
45 .9
48 . 4
31.6
110.6
32 . 8
2.3
2.2
331 . 0
3 48 . 7
110.6
115.4
67 . 5
70 . 2
39.4
39 . 0
9.6
9.6
41 . 9
39 . 9
50.0
50 . 9
34.4
34 . 5
3.4
3.4
3.7
2.1
2 .0
358 . 8
365 . 1
1 10 . 2
70 . 1
9.4
9.0
51 . 7
35. 3
36 2 . 1
37 . 5
51 .6
35 . 1
3 . 5
3.3
1 .9
73.0
41 . 1
39 . 6
39.0
109 . 2
1.9
360 . 2
104 . 9
73.2
37.8
35.4
50 . 2
35.2
3.0
3 ,0
351 . 5
103 . 0
73 . 3
36 . 6
8.7
8.2
33 . 9
49 . 8
34 . 6
2.9
3.0
345 . 2
98 . 5
96 . 6
73.8
71 .9
70.4
70 . 2
35 . 4
34 . 0
32.5
48 . 4
47 . 5
33.4
33 . 0
2.5
2.7
2.8
31.4
2 .8
335 . 1
327 . 6
30 . 1
46 . 5
45 . 5
32 . 3
31.9
2.7
2.8
2.6
318 . 6
314 . 1
93.9
93 . 3
See
OIL
MI N
f o o t not e s
32.4
3 1 .6
to table 7
7.8
7 .6
7.5
7.5
28 . 7
2.8
TABLE 1 1 : NATI O)I;A L I TY BRtAK DOI>"t\ o r S Y N D I CATED LOAN AANA G E R S
Per ce n t s h a r e s by n u D'Ib e r o f appe a T a n c e s
OtCD -MAJ
MlN
S CAN D I )I;
LDC
TO 1 9 8 4
1 9 72
-
OI L
tXP
EA S T
BLOC
N Ot
NIC
.2
.1
.7
.1
.o
1 . !>
1 .9
OTH ER
TOTkL
I NT
I N ST
.9
6.7
.3
BR I T I S H
DUTCH
F RE N C H
G E RMAN
I TA L I AN
LUXEMBRG
S P AN I S H
S I>' I S S
OTH E R !:U
1 !> . 1
1 .8
11.4
3.8
6.8
1 . 1
.4
4.9
4.0
1 1 .4
2.2
7.8
!> . 9
11
1
12
9
.7
.8
6.3
1 .6
6.4
11.1
1 .7
9.9
3.8
1 . 1
.5
.9
2.4
2.4
.9
.9
.1
. !>
.9
1 . 3
.7
.9
7.1
10.1
.9
7.1
4.9
.7
.5
1 .7
1 . 3
2.5
10.4
.8
7.1
6.6
.7
.5
1 .0
1 .9
2.3
11.3
.8
9 . !>
3.7
.4
• 3
1 .0
1 . 5
1 .8
18 . 1
. !>
12.1
1 !> . 4
1 .)
2.2
8.0
.7
19.7
11.7
2.9
8.2
8.8
.7
2.2
11.7
1 .4
9.0
5.2
1 . 7
.7
2.2
2.3
3.7
A.M t R l CI\N
CANAD I AN
22 . 8
7.2
22 . 1
6.3
27 . 9
6.0
20 . 1
7.4
31 . 1
8.0
28 . 5
7.4
33 . 0
7.5
17.6
2.7
16 . 1
4.4
26 . 5
6.9
AUST+NZ
J A PANE S E
H OI'G KONG
OTH E R AS
.3
11 . 1
.l
• 3
.
10.
.
.
9
7
l
l
.1
8.6
.8
• 5
13.6
.0
.1
1 1 .4
.9
2.1
• 3
10.0
1 .4
1 .7
• 5
1 .6
1 .6
.0
.0
16.8
.o
.1
12.4
.4
2.5
.4
10.7
.6
1 .0
.o
.o
.o
.o
.o
.o
A RAB
3.7
3.2
12.4
6.3
5.0
4.3
4.6
2.9
5.1
C ON S O RT I A.
2.6
4.7
6.7
.o
3.4
5.4
7.9
6.4
7.1
8.8
5.6
.0
.1
.2
.0
.3
.0
.0
.8
1 .7
.0
2
.0
1.3
1 .8
• 5
.0
.0
1 .4
1.6
.2
. 1
.l
• 2
MtX l CA.I\
CA. R I BBI'
AF R I CAN
COME: CON
OTH E R
.o
.o
.o
UNCLEAR
Memo
.o
.o
.o
. 1
1.6
1 . 3
•
.o
1.1
.o
.0
3.8
1.5
.o
.1
1 .4
2.6
.0
.o
.o
.o
.5
1 .6
.o
.o
.o
•
•
2
2
.o
.7
.7
2.2
.1
1.2
1.7
i t ems
N u mbe r
of
loans
235
Tot a l
n u mb e r
1440
for
l OO
of
wh i ch
59
no m a n a g e r s h a v e b e e n r e c or d e d :
20
88
89
13
3
674
1 34 5
1163
127
37
7471
l oa n s a nn o u n ce d :
1618
982
207
552
TABLE
us '
e
1 2 : VALUE OF SYNDI CATED LOANS USED
i 1 l i on
OECD
HA.)
1 97 2
19 73
1974
197S
1 976
1 977
1978
1979
1 9 80
1 901
1 982
1 98 3
1 9 84
1 2 58
4520
10379
1 6 90
3757
7 6 38
1 3420
1 1 34 6
1 8 5 08
48899
1 7 776
7 3 64
8029
IN MEAN S P READS CALCU LA T I ONS
MIN
OIL
EXP
EAST
BLOC
NOE
NIC
LDC
S47
1816
3954
3 3 07
4272
7 1 37
1 0 3 20
1 3 796
l S058
1 37SS
1 2920
1 0 1 94
5122
3 30
1 5 97
781
2711
4071
7 1 SO
9183
1 0666
1 2479
1 264 2
1 2 546
4633
3111
ss
380
97S
2045
1 587
2 1 94
2460
3720
2713
846
S12
548
2 1 27
54
1210
1 5 32
2217
3167
28 3 1
8054
91 1 1
6 7 64
98S8
1 1 S 86
9 37
1 007
4 32
160
l 70S
2989
2953
4 378
7951
1251S
1 06 4 3
1 3677
9346
2 39S
2901
192
S29
18S2
1733
286 7
3629
7 202
7092
7081
1 0892
6950
3518
2 S 26
162
3 00
460
410
1 0 27
0
1 50
3110
S93
421
1 4 38
402
744
OTH E R
I NT
TOTAL
I N ST
60
3091
0
10512
l OO
21 737
65
1 7167
166S
2 5 3 66
1 275
362 33
650
5 9 389
385
71741
S84
7 44 2 3
H2 1 1 1 342
0
7 3 092
1 2 40
31233
12S
25692
1972
4 96
47
4 30
28S
1 70
12
1 2S
240
120
0
1 16
94
35
0
20
0
40
0
0
14
10
0
0
422
17
20
105
so
0
80
82
0
60
0
0
0
948
1 59
878
1 105
1 973
0
200
277S
1S4S
40
792
770
214
S 50
200
51 3
334
so
330
0
0
l OO
100
430
580
1 40
0
0
20
0
0
284
24S
0
0
0
300
0
0
0
0
880
1622
4772
3 2 38
1 9 74
7S31
1 34 1
749
7S8
9S3
1 3 03
1 160
5 38
17S
176
210
220
45
S80
1 00
2SO
1 10
64 5
349
427
23S
576
3S8
537
625
706
181
34 1
2 00
0
28
232
0
100
0
0
9874
5426
313S
3302
197S
7 06
345
342
297
3S9
94 9
8 38
1162
75
737
1479
420
360
3SO
51S
820
320
813
5 04
580
8S8
530
1 0 06
595
344
419
7 08
262
85
0
1 00
22S
0
0
25
40
3 1 08
4142
5516
4401
1 976
1 1 44
1 547
673
394
399
1 7 34
987
1151
6 26
1 272
1 7 03
471
265
785
162
375
743
66 S
432
1 3 28
265
584
886
1218
1 3 5S
686
1 89
637
SS8
30
205
234
900
40
2S
7 00
6255
7343
5 262
65C7
1977
2373
1827
4 68
2970
1 890
1 8 26
652
2769
2 1 64
1 309
2335
1 34 3
325
451
54 3
875
508
748
1 4 80
95
lOSS
771
1 1 38
1415
590
875
586
1 578
0
0
0
0
0
500
so
725
8906
8 307
7251
1 1 7 70
1 9 78
3987
2092
4 7 56
2585
2334
27 1 0
3 6 06
1671
2745
1839
2479
2121
5 00
BOO
390
770
1885
1822
2 3 59
1988
1868
1 2 39
3457
1 386
1 9 10
1212
1917
2162
0
0
0
0
5 00
1 50
1 S22B
11714
1 9464
1 2983
1 9 79
2465
2480
2245
4 1 56
2855
3273
4112
3556
2427
333 5
3693
1211
1715
549
1 1 09
34 7
1573
34 1 4
1 928
2197
3610
3105
2616
3185
1627
1 78 1
1977
1 7 08
787
2232
90
0
125
0
160
100
17183
20168
1 7930
16460
1980
3988
2 1 68
2215
10137
4 0 94
S OOB
2 1 08
3849
2275
4203
3408
2593
594
476
792
851
832
1 9 08
2 3 04
1721
24 1 2
2636
1741
3853
1 9 09
1457
1 2 06
2 5 09
35
0
S24
34
250
1 59
0
175
16 388
1 80 1 5
14298
25723
1981
4089
852 1
27642
8646
4 594
3 5 58
1 S74
4028
2478
1 948
2903
5313
6 56
102
BB
0
2668
2524
2 1 50
2S18
3 2 84
3679
2932
3782
3852
1910
1974
31S7
57
195
69
S 09 6
4 7 26
5988
1 96 5
S l 04
2717
3 165
1943
3328
2916
3 3 87
2914
1 10
35
317
so
4796
S902
2 54
635
2803
2603
2267
1673
1 484
3122
1421
931
410
60S
393
30
1 476
2050
1461
2376
3462
2522
1 94 3
2267
1 5 33
1 660
469
971
218
80
250
0
445
202
1 24
166
693
S53
7 32
417
1 4 44
492
1424
l S8
2 00
so
102
so
1 240
0
0
9472
8850
6505
6 4 06
1 7 82
2205
3078
96S
1 482
724
266
S82
1 S4 0
S10
soo
S77
S40
163
772
S50
183
111
671
925
S34
6 SO
718
457
701
4 19
1SO
175
0
0
12S
0
0
6501
6 2 09
7798
S 1 84
1 982
1 983
1 984
1025
1821
793
Theee amo u n t • r e l a t e o n l y t o L I BOR-ba e ed
a r e a e t o u t i n S e c t i on V on p a g e 4 6
l oa n e :
0
lSO
the other
lOO
� i nor
so
20
0
282
0
0
0
0
0
2 1 7 27
22457
39332
27826
2 3 1 30
2 2 6 26
1 7 1 94
10141
r e e t r i e t i on a
TABLE 1 3 :
Pe r ce n t
M EAN S PPL\OS
OECO
MAJ
MIN
OIL
EXP
EAST
BLOC
NO!:
NIC
LOC
. e7
. 66
.6e
1 . 42
1 . 42
.99
• 7 7
. 57
.57
.53
. 54
.60
. so
1 . 01
. 7e
. ee
1 . 51
1 . 43
1 . 14
. 84
.e1
. 68
.53
.55
.70
.es
l . Oe
.93
1 . 16
1 .65
1 . 44
1 . 19
1 . 01
. 7e
. 61
.64
.eo
. 76
. 64
.91
. 90
.es
1. 32
1 . 34
1 .12
• 7 5
. 77
.91
.62
1 . 10
1 . 19
.85
1 . 44
.e7
1 . 06
1 . 56
1 .53
1 . 56
1 .05
. 77
. 67
. 6e
. e6
.71
.ss
l . 2e
1 . 03
1 . 31
1 . 62
l . e6
1 . 79
1. 25
. 03
1 . 06
l . 39
1 .62
.91
, 69
1
l
1
1
1
1
1
1
1972
1 . 23
1 . 24
.ss
. 67
1 . 30
1 . 75
.45
1 . 05
1 .21
1 . 00
1 . 25
1 . 00
1 . 04
. 97
,75
1 . 75
1 .50
1 . 36
1 . 00
.55
. ss
. e7
. 25
. e2
.75
.e1
1 . 00
.90
.e1
1 . 02
.so
. 97
. 60
• 74
. 93
1 . 17
.65
. 76
1 . 02
1 . 29
1 .41
.91
1 . 07
1 . 23
l
1
1
1
. 26
. 48
. 57
.51
1
1
1
1
.51
. 54
. 52
. 47
1 9 76
1
1
l
1
. 76
. 20
. 34
. 41
1
l
1
1
1 9 77
1978
1 979
1 980
1981
1 9 82
1983
1 9 84
Th e e e
TOTAL
. 31
. 39
.41
. e3
. 7e
. 67
. 22
. 01
.95
.9e
.90
1 . 12
. eo
. e9
. 92
1 . 09
1 . 69
1 . 70
.75
1 . 01
. eo
.e9
1 . 56
1 . 52
1 . 2e
. 9e
.77
• 7 3
.71
.e2
• 7 5
.67
1 . 50
.52
. 90
.75
• 74
. 77
.60
.65
l . 55
1 . 12
1 . 14
. 74
.71
. 60
.62
.45
,75
.75
1 . 03
.75
1 .21
l . 21
.72
1 . 05
2 . 00
1 . 29
. 75
2 . 00
. 94
.65
1 . 00
1 . 25
l . Se
1 . 17
. 64
.68
1 . 05
1 . 20
.9e
.e2
1 . 17
1 . 36
1.
1.
1.
1.
1
l
1
2
1 . 57
l .79
1 . 61
1 .53
1
1
1
1
. 43
. 21
. 35
. 29
1. 54
1 .61
1 . 52
1 . 54
1
1
1
1
. 67
. 64
. 47
.78
L ee
1 . 85
l .79
1 . 87
l . 76
l . 75
1 . 64
1 .63
1 . 50
1
1
1
1
.45
. 37
. 56
. 41
1
1
1
1
. 60
. 44
. 34
. 58
1
1
l
1
. 49
. 34
. 37
. 22
1
1
1
1
. 49
. 64
. 74
. 44
1
1
1
1
. 84
. 83
. 90
. 86
1
1
1
l
. 78
. 76
. 98
.73
1
1
1
1
1 . 20
1 . 57
1 . 38
. 98
1 . 61
1 . 44
1 . 55
1 . 49
. 99
1 . 12
1 . 22
.87
1 . 20
1 .17
1 . 36
1 . 04
1
1
1
1
. 20
. 15
. 18
.21
1 . 29
1 . 17
1 . 24
. 96
1
1
1
1
. 55
.41
. 65
. 40
1
1
1
1
. 81
. 99
. 81
. 66
1
l
1
1
. 88
.72
. 55
. 60
1 . 20
1 . 25
1 . 09
1
1
1
1
.82
.79
.73
. 74
. 89
.Bl
. 78
. 96
1 . 00
1 . 16
1 . 00
.91
. 92
. 75
, 72
.65
1 . 15
l . Oe
1 . 07
.90
1
1
1
1
. 54
. 54
. 08
. 02
1 . 47
1 .41
1 . 15
. 96
.70
.50
. 57
.53
. 81
.71
.97
• 7 2
. 99
. BS
.62
. 64
.92
.69
.62
. 84
. 86
. 66
.67
. 90
. 77
. 79
.85
1 . 00
1 . 10
1 . 02
.94
.52
.51
. 82
. 88
.72
. 50
. 86
.75
.77
• 7 1
59
56
57
57
.67
.62
. 75
• 7 1
.74
. 60
.48
. 70
.84
.69
.55
. 71
.Bl
1 . 00
.95
1 . 32
1 .13
.93
.95
.83
.63
.63
.63
. 74
• 7 0
.ss
.71
.76
. 46
. se
. 51
. 58
. 50
.ss
.64
.50
.67
.67
.64
.60
.62
.63
.62
1 . 21
1 .52
1 .53
1 . 02
.92
. 98
. 98
. 75
.75
.65
. 82
. 54
.49
.53
.64
.63
. 46
.47
.57
. 56
.73
. 84
1 . 09
. 52
.75
1 . 28
1 . 50
.95
1 . 60
. 70
1
1
1
1
.63
. 53
. 64
. 68
1 . 08
.71
. 96
1 . 19
. eo
.75
. 66
.83
.68
. 56
.68
. 54
. 66
.72
. 68
. 77
.BS
.59
1 . 20
.70
1 . 23
1 . 00
1 . 22
.57
.53
. 99
1 . 10
.71
1 . 42
• 79
. 76
1 . 08
.98
1 . 26
.63
.85
.69
.66
.75
.42
. 59
.49
.48
. Bl
. 72
1 . 04
. 67
. 74
.62
.62
.61
.75
.97
. 78
.91
.53
. 44
.75
. 76
. 74
.75
. 68
. 58
1 . 04
. 70
1 . 17
.43
.51
.64
• 7 7
1 973
1 :- --: :.
HIT
I NST
1972
1973
1974
1975
1 9 76
1 9 77
1 9 78
1 979
1 9 eO
1 981
1 982
1983
1 9 84
1974
O'ni !: R
.
.
.
.
everegea . e r e
•
f, '-
. 7 J.
71
1 .45
.65
•
. eo
.60
. 78
.55
. 74
we i gh t e d b y e11ou n t
07
23
17
59
1 . 33
.
.
.
.
11
35
39
10
.91
. 90
.71
.87
.92
. 69
.65
1 . 00
1 . 45
. 77
. 88
. 72
. 49
72
.81
•
1 . 50
.93
.75
1 . 00
1 . 00
.52
. 67
.88
1 . 06
1 . 40
. 54
. 61
. 56
. 53
. 2e
. 31
. 43
. 17
1 . 08
1 . 04
. 92
. 89
.77
.72
. 64
. 74
. 78
79
. 80
. 99
•
. 45
.75
.77
.68
. BB
. 68
.68
.66
.72
,60
TABL E 1 4 : VJ>.L U E O F �� l CATED LOANS U S ED I N Ml:AN MATU R l Tl E S CJ>.LCULATl ONS
us $ lll i 1 1 i on
OECD
MAJ
OIL
EXP
EA S T
BLOC
NOE
NlC
MlN
LDC
98
435
1155
2045
36 1
1 590
1819
2 5 07
3 2 (, 7
2881
8539
9192
6933
1 1005
1 2 1 56
1 284
1025
754
706
2034
3115
3047
4428
8105
13326
1 09 9 7
14 506
1 1 601
3516
3399
207
1014
1 991
1794
2906
3656
7267
7332
7861
11470
7124
3833
2605
299
4C3
730
410
971
12
150
3 2 60
593
421
1 3 88
402
804
170
0
87
104
26
70
60
598
42
25
167
82
25
120
0
0
0
1707
710
1 3 61
1801
l OO
295
58
224
0
0
163
300
0
2018
4112
631 3
4779
OTH E R
1972
1 97 3
1974
1 97 5
1976
1977
1978
1 979
1 98 0
1981
1 982
1983
1 984
2077
8237
1 26 8 5
1761
4187
7701
14798
1 26 3 5
20369
56355
23149
8 1 64
9281
1075
2311
4511
3542
4589
7402
10735
14271
1 7628
1 54 1 9
18195
1 34 9 7
5587
58 7
2466
1027
2776
4 1 02
7871
9507
11 305
1 2 8 96
1 28 0 2
1 38 1 9
5 524
3 5 04
1 972
843
233
5 30
470
259
127
303
386
186
93
1 24
185
468
2115
3265
2390
97
984
835
395
878
431
7 03
454
220
50
265
485
740
8 5 44
1890
1 228
1023
1 099
1553
1 257
602
380
250
1 50
248
155
580
l OO
320
210
832
349
42 7
4 20
4 59
556
4 38
309
431
969
9 38
1 206
60
792
1 5 04
420
360
350
515
820
345
908
5 04
750
912
454
1 086
663
262
225
1283
1693
BOB
404
399
1798
11 55
1237
646
1272
1714
471
265
785
743
665
265
626
1 3 64
686
5 58
30
162
375
532
1328
938
1218
189
667
205
2407
1 827
497
2970
1935
1925
652
2890
2 1 64
1359
2371
1977
325
5 08
1090
771
1152
14 1 5
3630
3242
5131
2795
2358
2763
3746
1868
1878
1269
3469
1488
2790
2 7 00
2761
4384
2945
3 369
4 1 86
3771
4670
24 1 1
2990
10298
4 1 46
5569
2735
5179
1973
1 974
1975
1 976
1977
1978
1979
1 980
1981
1982
1 98 3
1 9 84
The ae
284 5
1 58 7
2 1 94
2574
4 2 20
2825
1 07 5
512
548
2 1 27
35
0
63
0
105
60
451
543
748
875
1 4 80
145
129
681
366
568
0
317
0
60
3 50
85
0
454
728
0
l OO
0
25
40
178
590
875
0
l OO
0
601
1 590
12
500
50
0
725
9 1 20
84 5 6
7357
1 2586
1958
1212
1 9 34
2162
0
0
15314
0
0
1 3 006
0
520
20333
150
150
1 3 6 92
1573
34 1 4
1 961
2244
2511
6 57
431 5
526
864
1908
2329
1832
26 1 2
2636
1895
3853
2170
1467
1413
281 1
3958
2130
2 1 80
3202
1580
3170
1370
1 0 04
792
2478
885
3775
4232
1665
4922
1 8 97
2903
5525
1 02
88
0
2 5 24
2 1 50
2557
3397
3623
3 360
4 1 26
6271
6353
6442
7441
2480
4144
2662
110
35
317
50
3 284
5036
3 59 1
3 5 36
3714
2978
4 7 96
6956
3829
2 5 08
1 98 0
1731
2253
5 270
2950
218
eo
645
1 595
2585
2 1 26
3151
2 2 78
1 68 9
547
1010
1969
1 5 27
3241
3 1 06
965
1075
1 8 54
254
66 5
3001
4483
5837
4695
6422
7 5 94
1715
949
1109
447
851
11675
6843
3689
3905
900
40
25
700
2447
3335
3693
1830
26 1 5
0
lOO
770
3455
0
200
1822
2 3 84
2188
3247
2715
3215
0
185
28
2145
4 1 50
120
5579
0
17222
160
26 1 1 2
65
18016
1665
26322
1 37 5
37520
670
62344
385
7 5926
5 84
80685
3 5 2 1 2 34 06
0
87945
1240
380 1 0
125
28457
667
773
211
341
5 00
4601
relate
418
321
814
490
5 2 08
a lll o u n t &
75
200
1883
2659
2121
10961
2 9 268
10918
1131
20
112
33
TOTAL
I NT
l NS T
1723
1786
2055
1768
5728
6577
1 8 3 04
837
125
223 2
0
190
0
160
1 00
18831
17759
35
0
524
34
2 50
17914
18991
16132
27649
57
so
20
0
282
2 5684
41682
31631
0
26395
0
20 14 2
195
69
lOO
410
5 55
393
30
159
0
175
0
0
0
2 1 03 2
24409
29559
1 1848
1 2 98 1
10055
7 26 5
1 0 26
930
1063
497
561
1457
0
302
124
213
201
102
50
9 44
510
163
1 1 00
669
419
0
7 301
386
634
1 54 0
500
577
569
796
949
5 54
744
490
210
175
0
125
0
0
7645
7969
5542
to a l l
250
540
loans
183
111
for
wh i ch t h e
1614
701
f i na l
200
50
1240
0
0
lll a t u r i ty d a t e
7 7 08
ia
k n own
TABLE 1 5 :
Ye a r s
MEAN F I NAL MATU R I T I E S
OECD
HAJ
MIN
OI L
E XP
EAST
BLOC
NOE
NIC
LDC
6 . 27
9 . 64
7 . 56
5 . 77
5 . 45
6 . 34
8 . 60
9 . 36
8 . 12
7 . 44
7 . 43
6 . 69
7 . 37
5 . 45
9 . 03
6 . 40
5 . 12
5 . 32
1 . 50
5 . 00
4 . 70
7 . 32
6 . 08
5.72
7 . 05
8.72
3
8
7
5
5 .60
5 .72
5 . 00
4 . 92
OTH E R
1972
19]3
1974
1975
1 976
1977
1 978
1979
1 980
1981
1 982
1983
1 9 84
5 . 50
8 . 52
8 . 31
5 . 23
6 . 23
7 . 04
8 . 37
9 . 06
8 . 06
7 . 91
7 .27
6 . 20
7 . 00
7 . 45
9 . 84
7 . 61
6 . 18
5 .77
7.13
8 . 26
9 . 13
8 . 29
8 . 34
9 . 09
7 . 42
6 . 82
6 . 87
9 . 76
9 . 72
5 . 69
6 . 44
6 . 72
8 . 37
6 . 68
4 . 76
4 . 58
4 . 27
7 . 11
7 . 45
6 . 18
9.23
7 . 19
5 .44
5 . 08
6 . 34
7 . 42
8 . 03
(i . 4 9
5 . 23
. 4 . 40
3 . 91
5 . 71
7 . 31
9 . 35
9 . 10
5 . 10
5 . 71
6 . 81
8 . 13
8 . 80
7 . 06
7 . 94
4 . 95
9 . 12
8 . 27
8 . 51
10 . 30
8 . 91
5 . 96
5 . 48
6 . 58
10 . 1 2
1 0 . 37
7 . 70
7 . 59
6 . 91
6 . 10
6 . 36
197 2
5 . 27
4 . 82
4 . 54
7 . 33
6 . 39
8 . 12
7 . 04
8 . 27
6 . 10
6.73
7 . 25
7 . 38
5 . 00
8 . 41
6 . 84
5 . 54
7 . 00
5 . 62
7 . 00
9 . 50
B. 71
5 . 62
8 . 82
8 . 85
8 . 36
6 . 85
9.63
10 . 32
10 . 1 1
9 . 12
10.21
11 . 07
8 . 56
7 . 00
8 . 50
9 . 86
1 2 . 00
1 0 . 00
8.72
11 .71
7 . 93
9 . 86
9 . 76
9 . 99
1 2 . 10
1 0 . 67
7 . 92
9 . 86
10. 19
10.92
8 . 00
8 . 90
7 . 92
6 . 91
5 . 86
7 . 85
8 . 05
7 . 18
6 . 96
1 1 . 34
8 . 72
5 . 00
1 1 . 10
8 . 74
7 . 78
7 . 00
5 . 44
1 1 . 52
1 0 . 20
7 . 74
6 . 87
11 . 31
9.73
8 . 49
6 . 44
8 . 06
6 . 53
8 . 28
8 . 46
7 . 50
7 .81
4 . 50
5 . 04
5 . 32
5 .49
5 . 04
4 . 87
6 . 22
5 . 50
6 . 37
6.55
5 .42
5 . 26
5 . 56
6 . 98
6.33
5 . 00
5 . 50
5 . 18
4 . 71
5 . 04
5 . 00
5 . 41
7.
5.
5.
5.
08
25
76
26
5 . 24
5 . 45
6 . 10
6 . 08
5 . 00
1976
6 .77
6 . 30
5 . 56
5 . 60
5 . 88
5 . 52
6 . 10
5 . 78
5 . 87
6 . 18
6 . 96
6 . 01
5 . 38
5 . 00
5 . 20
5 . 00
4 . 79
6 . 23
5 . 64
5 . 98
5 . 49
5 . 54
6 . 21
4 . 88
5 . 39
5 . 36
3 . 72
6 . 16
1977
6 . 96
6 . 97
6 . 09
7 . 29
6 . 63
6 . 87
6 . 66
7 . 74
6 . 70
6.83
6 . 24
7 . 22
5 . 62
5 . 64
7 . 15
6 . 46
5 . 43
8 . 08
6 . 68
6 . 46
5 . 57
6 . 01
6 . 23
7 . 94
5 . 93
5 . 94
6 . 35
6 . 70
7 . 09
9 . 09
9 . 23
7 .61
7 . 63
8 . 79
8 . 30
8 . 17
8 . 65
7.55
8 . 15
8 . 99
6 . 30
6.73
8 . 04
8 . 49
8
8
6
8
. 91
. 85
. 35
.70
9 . 35
9 . 35
10 . 92
9 . 89
7 .63
8.23
8 . 98
9 . 36
8 . 31
1 0 . 05
9 . 23
8 . 83
8 . 84
9.73
9 . 20
8 . 76
7
7
6
6
8
7
8
7
38
36
32
37
7 . 87
9 . 12
7 . 67
9 . 97
10 . 19
1 0 . 38
10.91
10 . 11
8 . 60
8 . 76
1 0 . 02
9 . 92
5 . 01
4 . 56
5 . 05
7 . 14
6 . 90
6 . 97
9 . 06
8 . 85
7 . 99
8 . 17
8.23
6 . 47
4 . 59
2 . 52
6 . 36
7 . 53
6 . 56
6 . 89
5 . 25
7 . 04
7 . 66
6 . 23
7 . 50
8 . 17
7 . 96
7 . 06
7 . 52
9 . 13
7 . 89
7 . 58
7 . 74
1 0 . 00
7 .83
8 . 37
8 . 09
6 . 99
7 . 82
8 . 40
7 . 86
8 . 94
5 .23
3 . 16
4 . 98
4 . 56
5 . 72
2 . 00
4 . 04
8 . 47
7 . 52
7 . 92
7 .58
7 . 99
0 . 12
7 . 35
7 . 01
6 . 61
8 . 38
7 . 20
8 . 02
4 . 55
6 . 49
4 . 86
7 . 00
1982
7
6
7
6
. 44
. 68
. 82
. 84
9 . 53
9 . 66
8 . 70
7 . 57
3 . 66
3 . 78
4 . 92
4.81
8 . 00
7 . 00
2 . 92
4 . 00
4 . 10
5.15
5 . 26
8. 95
6
6
7
7
.62
. 88
. 07
. 25
6 . 25
8 . 33
7 . 44
6 .42
7 . 00
4 . 60
6 . 04
4.67
1983
6 . 03
5 .03
6 . 67
7 . 05
•e . 1 6
6 . 80
7 . 24
6 . 88
6 . 95
7 . 44
5 . 93
7 . 54
2 . 83
1 . 56
5 . 60
9 . 00
9 . 30
1 0 . 00
8 . 70
6
6
6
4
. 36
. 38
. 33
. 54
6
6
6
7
5 . 70
8 . 60
5 . 94
7 .70
7 . 66
7 . 25
5 . 12
8 . 09
7
6
7
7
3 . 94
7 . 10
6 . 09
5 . 67
9 . 60
9.11
6 . 21
5 . 37
1973
1974 ·
1975
1978
1979
1 980
1 981
1984
. 35
. 05
. 15
. 19
.62
. 10
. 33
.73
.
.
.
.
The s e a v e r a g e s a r e we i gh t ed by aJDou n t
7 . 24
5 . 45
6 . 84
5 . 11
.81
. 00
. 23
. 10
I NT
TOTAL
I N ST
5 . 00
5 . 16
5 . 00
4 . 99
6 . 80
9 . 99
9 . 86
5 . 36
7 . 06
7 . 00
7 . 00
5 . 00
6.57
9 . 12
8 . 17
5 . 67
5 . 76
6 . 80
8 . 54
8 .71
7 . 37
7.51
6 . 78
6 . 91
6 . 98
5 . 80
6 . 18
5 . 98
7 . 90
8 . 30
9 . 12
9 . 71
8.70
1 . 25
8 . 94
8 . 26
7 . 22
6 . 61
5 . 00
5 . 22
5 . 00
5 . 00
6 . 02
5 . 29
5 . 69
5 .77
5 . 25
3 . 00
6 . 22
4 . 90
4 . 83
7 . 00
7 . 00
5 . 00
5 . 59
5 . 80
6 . 16
5.55
1 . 50
5 . 50
6 . 50
7 . 00
7 . 17
6 .45
6.73
6.43
7 . 31
9 . 98
1 0 . 00
8 . 04
8 . 57
8 . 84
8 . 65
5 . 00
7 . 23
6 . 00
.71
. 02
.81
. 52
1 0 . 00
2 . 50
4 .52
5 . 00
7 . 66
6 . 67
6 .47
8 .47
11 . 74
4 . 76
6 . 23
7 . 50
7 . 00
1 2 . 00
1 0 . 00
7 . 00
7 . 00
1 . 54
4 . 00
4 . 00
7 . 82
8.53
8 . 61
8.71
9 . 00
7 .85
6 . 99
6 . 18
8 . 03
7
7
7
7
. 39
. 83
.73
. 03
6 . 64
6 . 67
7 . 20
6 . 63
7 . 00
7 . 00
7 . 32
6 . 46
6 .75
6 . 93
7
7
6
7
. 08
. 57
. 02
. 38
T.t.BL!:
Year a
MEAN AVERAG!: MA TU R l Tl t S
16:
OtCO
MAJ
HIN
OIL
�XP
EAST
BLOC
NO!:
NlC
LDC
OTH E R
I NT
TOTAL
I NST
1972
1973
1 974
1 975
1976
1977
1978
1979
1980
1981
1 982
1 983
1 984
3 . 00
4 . 81
4.41
2 . 86
3 . 43
4 . 40
4 . 90
5 . 84
4 . 46
4.72
4 . 54
3 . 84
4 . 18
3 . 98
5 . 17
4 . 06
3 . 51
3 . 16
4 . 29
5 . 02
6 . 22
5 . 18
5 . 72
5 . 60
4 . 97
4 . 91
3 . 68
5 . 13
5.11
) . 09
3 . 47
3 .73
4 . 90
4 . 37
3 . 21
2 . 99
2.91
5.ll
5 . 25
3 . 34
4 . 86
) . 85
2 . 97
2 . 79
3 . 55
5 . 08
5 . 69
4 . 71
2 . B9
2 . 93
2 . BO
4 . 26
3 . 91
4 . 99
4 . 80
2 . 87
3 . 14
3 . 78
5 . 08
5 . 88
4 . 48
5 . 20
3 . 18
6 . 36
6 . 28
4.51
5 . 40
4 . 71
3 . 26
2 . 99
3 . 61
5 . 86
6 . 86
4 . 95
4 . 70
4 . 70
4 . 12
4 . 39
3 . 38
5 . 07
4. 03
3 . 22
3 . 00
3 . 47
4.95
5 . 95
5 . 19
5.13
5.12
4 . 30
4.83
3 . 05
4 . 76
3 . 45
2 . 81
2 . 91
1 . 00
2 . 75
2 .61
4 . 94
4 . 04
3 . 55
4 . 09
6 . 33
2.75
1972
2 . B9
2 . 66
2 . 52
3.91
3
4
3
4
3 . 34
3 .61
3 . 87
3 . 94
2 . 75
4 . 46
3 . 02
3 .75
2 . 15
4 . 25
3 . 86
2 . BO
3.
3.
2.
2.
2 . 75
3 . 67
3 . 06
3 . 75
5 . 00
4 .61
3 . 06
5 . B4
4 . 68
4 . 43
3 . 6B
5 . 06
5 . 41
5 . 30
4
5
5
4
. B1
. 35
. 78
. 53
3 . 75
4 . 50
5 . 18
6 . 25
5
4
6
4
5
5
5
6
5
4
5
5
4
4
3
3
.
.
.
.
70
21
71
18
4 . 18
4 . 27
3 . 84
3 . 73
5 . 92
4 . 61
2 . 75
5 . BO
4 . 62
4 . 14
3 . 75
2 . 97
6 . 01
5 . 35
4.12
3 . 69
2
2
2
2
. 91
. 99
. 77
. 69
3 . 36
3.01
3 . 44
4 . 02
2 . 96
2 . 88
3 . 03
3 . 74
3
2
3
2
. 42
. 75
. 00
. 84
1976
3 . 64
3 . 56
3 . 03
3 . 05
3 . 19
3 . 01
3 . 40
3 . 16
3
3
3
3
. 19
. 34
. 73
. 25
1977
4 . 83
3 . 96
3 . 88
4 . 42
4 . 69
4 . 05
4 . 01
4 . 26
4 . 01
5 . 17
5 . 31
4 . 97
. 44
. 31
. 77
. 38
. 25
. 61
. 34
. 22
58
21
18
34
5 .71
4 . 25
5 . 91
5 . 12
4 . 49
3 . 47
4 . 28
3 . 51
4 . 39
4 . 48
4 . 00
4 . 16
2 . 50
2 . 77
2 .61
2 . 98
2 . 75
2 . 96
3 . 79
3 . 09
3 . 13
2 . B8
2 . 89
2 . 98
3 . 51
3 . 29
2 . 75
2 . 94
2 . 75
2 . 85
2 . 75
2 . 80
3 . 36
3 . 07
3 . 24
3 . 00
3 . 02
3 . 36
2 . 69
2 . 95
3 .01
2.11
3 . 33
3 . 67
3 . 82
3 . 59
3 . 92
3 . 06
3 . 69
3 . 83
3 . 48
3 . 65
4 . 29
3 . 59
3 . 48
3
3
3
4
. 04
. 27
. 57
. 26
3 . 34
3 . 28
3 . 43
3.63
4.12
4 . 79
5 . 90
4.71
5 . 41
4 . 18
4 . 55
5 . 28
3 . 92
4 . 87
4 . 27
6 . 56
5 . 70
4. 77
4 . 26
5 . 64
5 . 18
5 . 54
6 . 22
6 . 17
4 . 30
4 . 81
5 . 29
5 . 30
6 . 04
6 . 02
6 . 66
5 . 09
6.15
6 . 50
6 . 29
5 . 96
5 . 12
4 . 15
4 . 38
3 . 74
5 . 81
5 . 46
6 . 06
4 . 78
5 . 39
6 . 08
4 . 90
6 . 80
6 . 56
6 . 76
7 . 33
6 . 96
5 . 45
5 . 58
6 . 79
5 . 85
2 . 76
2.53
2 . 97
3 . 86
3 . 93
3 . 91
5.01
5 . 51
5 . 17
4 . 94
5 . 04
4 .61
3 . 22
1 .71
3 . 85
5. 77
4 . 84
5 . 01
3 . 54
4 . 38
5 . 48
3 . 74
4 .41
5
5
4
4
.41
. 51
. 30
. 58
5. 71
5 . 53
4 . 76
4 . 82
5 . 25
5 . 03
3 . 25
4 . 32
4 . 88
4. 77
4 . 60
5 . 35
5 . 92
5 . 36
6 . 01
3
1
3
3
. 32
. 92
. 36
. 02
3 . 11
1 . 25
2 . 58
4
5
4
5
4
4
4
4
. 69
. 93
. 59
. 58
4
6
5
5
. 39
.06
. 17
. 38
2 . 53
4 . 47
2 . 68
5 .00
1 98 2
4 . 07
4 . 01
5 . 63
3 . 95
6 . 22
5 . 39
5 . 34
4.95
2 . 39
2 . 37
3 . 49
3 . 46
5 . 75
5 . 00
1 .71
3 . 00
2 . 45
3 . 49
3 . 84
5 . 14
4 . 66
4 . 36
4 . 99
5 . 04
4
5
4
4
. 46
. 91
.79
. 11
4 . 34
3 . 23
3 . 27
2 . 58
1983
3 .71
2 . 88
3 . 94
4. 71
5
5
4
4
. 28
. 18
. 51
. 59
5 . 05
5 . 19
3 . 49
5 . 97
1 . 67
1 . 03
4 . 35
6
7
6
5
4
3
4
2
.45
. 98
. 50
. 93
4
4
4
4
. 38
. 10
. 26
.41
5 . 25
1 . 50
2 . 88
4 . 50
3 . 74
4 . 73
3 . 50
5 . 40
5 . 74
5 . 20
3 . 77
5 . 40
5 . B5
3 . 96
5 . 18
5 . 23
3 . 08
5 . 32
4 . 45
4 . 20
7 . 12
7 . 04
4 . 60
3 . 87
5 . 06
3 . 59
4 . 88
3 . 34
5
4
4
4
. 27
.77
.81
. 50
9 . 1B
3 . 05
3 . 45
1973
1 9 74
1975
1978
1979
1 980
1981
1 9 84
. 86
. 79
. 88
.41
. 22
. 14
. 34
. 70
.
.
.
.
1B
13
24
30
.
.
.
.
05
25
75
71
2 . 83
2 . 75
2. 74
3 . 76
7 . 67
5 . 86
3 . 79
3 . 96
5 . 00
6 . 25
) . 54
4 . 96
4 . 33
3.14
3.15
3 . 93
5.11
5 . 74
4 . 56
4 .72
4 . 36
4 .61
4 . 69
3 . 15
3 . 37
3 . 24
4 . 20
4 . 40
5 . 42
5.12
4 . 60
. BB
4 . 72
4 . 38
3 . 86
3 . 56
2 . 75
2 . 86
2 . 75
2.75
3 . 26
2 . 96
3 . 12
3 . 26
2 . B7
1 .75
3 . 36
2 . 70
2 . 67
3 . 75
3 . 75
2 . 75
3 . 06
3 . 19
3 . 35
3 . 03
3 . 00
3 . 50
3 . 75
4 . 05
4 . 06
3 . 81
3 . 64
4 . 09
7 . 64
7 . 75
4 . 70
4 . 87
5 . 38
5 . 37
1 . 00
2 . 75
4 . 00
3 . 75
7 . B9
5 . 25
5 . 75
3 . 75
1 . 02
3 . 50
2 . 25
4 . 16
5 . 75
5 . 49
6 . 00
5 . 76
4 . 92
4 . 65
3 . 80
4.72
4 . 51
5 .01
4 . 70
4 . 68
4
4
4
4
5 . 00
6 . 25
. 17
. 17
.91
. 31
4 . 84
4 . 48
4 . 26
4.73
5.11
4 . 83
4 . 03
4 . B8
Th e s e a v e r a g e s a r e �e i gh t ed b y amou n t
B e c a u s e o f 1 1 11 i t ed r e c o r d i n g o f g r a c e pe r i od s pr i o r t o 1 9 7 9 t h e r • s u l t a
not ba s ed on compr eh e n s i v e g r a ce p e r i od i n f o r ma t i on be f o r e t h a t d a t e
are
Papers presented to the Panel of Academic
Consultants'•'
Bank of England Discussion Papers
Title
8
1-5. 8 A list of these papers can be found in the
1 1 -14, December 1981 Bulletin, o r can be
16- 1 7 obtained from the Bank. These papers are
now out of print, but photocopies can be
& 21
9
obtained from University Microfilms
International (see below).
6
10
'Real ' national saving and its sectoral
composition
Author
Title
Author
International monetary arrangements the
P M Oppenheimer
limits to planning•
Institutions in the financial markets:
questions, and some tentative answers•
M V Posner
The arguments for and against
protectionism •
M Fg Sco11
The Hon W A H
C T Taylor
Godley
A R Threadgold
14
7
The direction of causality between the
9
The sterling/dollar rate in the noating rate
Prof A P
period: the role of money, prices and
M V Posner
exchange rate, prices and money
C A Enoch
intervention
I D Saville
10
Bank lending and the money supply
B J Moore
15
lnnuences o n the profitability o f twenty-
18
Two studies of commodity price
A R Threadgold
two industrial sectors
N
P Williarns
behaviour:
Interrelationships between commodity
prices
Mrs J L Hedges
Shon -run pricing behaviour in
commodity markets
19
Unobserved components, signal extraction
and relationships between macroeconomic
time series
20
C A Enoch
T C Mills
The usefulness of macroeconomic models•
Prof Angus Deaton
15
Factors underlying the recent recession•
17
W h y do forecasts differ?•
Minford
G D N Worsv.ick
Prof M J Astis
19
Bank lending, monetary control and
20
The economics of pension arrangements•
22
Monetary trends in the United Kingdom
funding policy•
Prof A D Bain
Prof Harold Rose
J A Kay
Prof A
J
Brown
Prof D F Hendry
and N R Ericsson
23
The UK economic recovery in the
1930s
G D N Worswick
P N Sedgwick
Prof Michael
Beenstock
Dr Forrest Capie
C B Briauh
Prof Brian Griffiths
Dr S K Howson
22
L
Dr A Budd
A ponfolio model of domestic and
external financial markets
Prof W H Buiter
T F Cripps
I D Bond
24
Employment, real wages and
unemployment in the
Prof J R Sargent
U nited Kingdom
Sir Bryan Hopkin
Technical Series
The consumption function in
macroeconomic models: a comparative
study•
2
E P Davis
8
Financial asset ponfolio
allocation by industrial
and commercial companies•
Growth coefficients in error
correction and autoregressive
distributed Jag models
K D Patterson
9
Some propenies of the
G P Dunn
Bank model•
N H Jenkinson
I M Michael
Composite monetary indicators
for the United Kingdom;
G Midgley
construction and empirical
analysis•
4
T C Mills
The impact of exchange rate variability
on international trade nows•
5
Trade in manufactures
6
A recursive model of personal sector
7
A dynamic 'uanslog' model
G Justice
A C Hotson
K L Gardiner
expenditure and accumulation•
10
11
12
Asset demands and interest rate setting
equations in imperfect markets
(a) Other papers in this series were not distributed.
1973 - 1982
D G Barr
The development o f expectations
generating schemes which are
asymptotically rational
E P Davis
D J Asteraki
These pape�s arc no longer available from the Bank, but photocopies can bt obtained from University MicrofLims International, at
30-32 Morumer Street, London W I N 7RA.
C J Green
Exchange rate variability:
evidence for the period
of substitution technologies
in UK manufacturing industry
Mrs P D Jackson
K
D Pauerson

Discussion Paper No.22: The syndicated credits market

Transcription

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