U2 Topic 1 Loans and Syndicated Loans

SYNDICATED LOANSSteven A. DennisCalifornia State University at FullertonDonald J. MullineauxUniversity of KentuckyAbstractThis paper analyzes the market for syndicated loans, a hybrid of private and public debt, which has grown at well over a 20 percent rate annually over the last decade and totaled over $1 trillion in 1997. While loan sales have been heavily researched, there has been little work on syndications, which differ in character from sales. We present empirical evidence that the extent to which a loan can be syndicated increases as information about the borrower becomes more transparent, as the syndicate’s managing agent becomes more “reputable,” as the loan’s maturity increases, and as the loan lacks collateral. The lead manager holds larger proportions of information-problematic loans in its own portfolio. Loan syndications, like loan sales, appear to be motivated, in part, by capital regulations, but the liquidity position of the agent bank does not influence its syndication behavior. Activity in the syndication market is broadly consistent with Diamond’s (1991) “life-cycle” model of borrower choice, but our results also support the view that contract characteristics and reputation can serve as “substitutes” for information in the debt market.KEY WORDS: LOAN SYNDICATIONS, BANKING, AGENCY COSTS,REPUTATIONContact:Donald J. MullineauxGatton College of Business and EconomicsUniversity of KentuckyLexington, KY 40506-0034Phone: (606) 257-2890Fax: (606) 257-9688E-mail: mullinea@Syndicated LoansA significant literature has emerged in recent years on the topic of borrower choice between private and public debt. A consensus view suggests that a critical factor driving the choice is the character and quality of the information available about the borrower. Diamond (1991) develops a formal model which involves borrowers shifting from private sources (financial intermediaries such as banks and insurance companies) to the public markets (commercial paper and bonds) as the quality of the information about the firm improves and the borrower develops a “reputation” in the form of a history of successful debt repayments. Carey, Prowse, Rea and Udell (CPRU, 1993) propose an extended continuum, with firms gravitating from insider finance, through venture capital, bank loan finance, private placements, and the public debt markets as information and collateral become increasingly available and the borrower’s repayment “track record” improves. As borrowers become less “information problematic,” the characteristics of the lenders and the underlying debt contracts vary systematically. Bank loans tend to be relatively short term, involve extensive covenants, and are frequently re-negotiated. The majority of public-debt contracts are longer term, involve relatively loose covenants, and are almost never restructured. These contractual characteristics have been extensively examined and rationalized in the literature in papers such as Berlin and Loeys (1988), Berlin and Mester (1992), and Rajan and Winton (1995).As CPRU note, some borrowing techniques and their associated contracts involve overlap between the public and private markets. They focus primarily onprivate placements, which involve lenders who are intermediaries (typically insurance companies) and contracts that have relatively strict covenants and reasonably frequent restructuring, which are all characteristics of private debt. Like public debt, however, private placements are issued in large amounts by sizable firms at fixed interest rates, and sales of these debt claims to investors normally are facilitated by investment banks or commercial bank holding company affiliates.1 In addition, James (1987) finds that announcing private placement financing has no effect on the equity returns to the borrowing firm, whereas loan announcements have a significantly positive impact.Still another type of financing that involves characteristics of both public and private debt is syndicated loans. Syndication involves the sale of a relatively large commercial loan in “parcels” to a group of institutional buyers, whereas a private placement typically is the sale of a “whole” debt contract to a single lender (although some private placements involve a relatively small group of lenders).In principle, any loan could be syndicated by any financial institution that acts as a loan originator. In practice, only certain kinds of loans and certain types of institutions engage in syndications. This paper identifies the factors that influence a loan’s syndication potential. Our maintained hypothesis is that the characteristics of the borrower, of the lender, and the loan contract itself can play some role. By sorting out these influences empirically, we hope to: (1) provide further evidence on the significance of information problems and mechanisms for resolving them in financial contracting and (2) specify where syndicated loans “fit”on the private/public debt continuum.An analysis of syndicated loans also may provide indirect evidence concerning the role of relationships in financial arrangements. Recent papers by Berger and Udell (1995), Petersen and Rajan (1994), and Cole (1998) provide evidence that an ongoing relationship between a borrower and financing agent can serve as a mechanism for attenuating agency and information problems. When borrowers seek multiple loans from the same bank over time, a repayment history accumulates and the lender forms a more extensive and dynamic information set based on multiple assessments of financial statements, discussions with managements, and possible renegotiations. When lending is complemented with the provision of deposit, cash-management and operations-based (e.g., payroll) services, the information set becomes still broader and deeper. Berger and Udell (1995) find that interest rates and collateral requirements on lines of credit decline with the length of a bank-borrower relationship, while Petersen and Rajan (1994) provide evidence that dependence on trade credit decreases with the length of a relationship. Cole (1998) finds that the probability a small business will receive credit increases in the presence of a relationship, especially if the borrower obtained multiple services in that context.When lenders provide funds to borrowers in the context of a syndicated loan, the elements that facilitate establishing and deepening a relationship are less likely to be present. While the lead bank may have some form of relationship with the borrower, this is less likely to be the case for participating members. Since the buyer of the syndicated loan cannot rely on relationships with the borrower as a substitute for other mechanisms that resolve agencyproblems, evidence that certain loan contract characteristics play a different role in a syndication context relative to a relationship setting would confirm the relevance of relationships as a factor for resolving information problems.Section I of this paper provides an overview of the loan syndication market. Section II specifies a model that identifies the various factors which affect the syndication potential of individual commercial loans. Section III provides estimates of the model and interprets the results. Section IV provides some conclusions.I. Overview of the Loan Syndication MarketSyndicating loans is a centuries old process that has shown significant growth in the 1990’s. Gold Sheets Annual, a publication of Loan Pricing Corporation, reports that loan syndication volume hit a record high $888 billion in 1996 compared to $137 billion in 1987, a compound annual growth rate of roughly 23 percent.2 In 1997, loan syndications exceeded $1 trillion for the year as a whole, compared to roughly $300 million of private placements. Syndicated financings in 1996 were employed largely for general corporate purposes (49.5 percent) and for debt repayment (33.5 percent), which represents a considerable shift from the late 1980’s when syndicated loans were used primarily to finance mergers and acquisitions and leveraged buyout activities. The rapid growth in volume has been accompanied by declining spreads and fees. In 1996, the average rate spread over LIBOR on BB credits averaged 71 basis points,compared to 130 basis points in 1992. Average fees were lower by about 10 basis points over the same period. Buyers of syndicated credits included commercial and investment banks, insurance companies, mutual funds, and other institutional funds managers. The American Banker (November 18, 1997) reports that over $14 billion of loans were syndicated in 1997 through the Internet, including a $4 billion loan to Compaq Computer, Inc., using a secure private communications system called Intralinks.The syndication market has grown significantly more than the private-placement market in recent years and, according to some practitioners, has begun to converge with the junk bond component of the public debt market in terms of borrowers, investors, and underwriters. The convergence has been facilitated by innovation in contractual structures in the syndication market, including the establishment of loan “packages” containing tranches with longer-than-average maturities (10-12 years), bullet repayments of principal, and call protection. These various innovations, in turn, are fueled by competition between commercial and investment banks for syndication share and the increasing availability of information about such deals. The American Banker reports (August 1, 1997) that three information services—Loan Pricing Corporation, Securities Data Company and Portfolio Management Data LLC—compete aggressively in this market, updating their databases on-line on a daily basis. Securities Data Company reports that among the top 25 managing agents in the first ten months of 1997, investment banks had 18 percent market share,compared to 5 percent over the same period in 1996 (American Banker, December 12, 1997).In a syndicated loan, two or more banks agree jointly to make a loan to a borrower. As emphasized by Gorton and Pennachi (1995), loan syndications differ from loan sales. A loan sale typically involves a “participation contract”which grants the buyer a claim on all or part of a loan’s cash flows. The buyer of a participation is an “indirect lender” with no relationship to the borrower. From a relationship viewpoint, the purchaser of a participation is in a position similar to the buyer of a public debt contract. In a syndication setting, each bank is a direct lender to the borrower, with every member’s claim evidenced by a separate note, although there is only a single loan agreement contract. One lender will typically act as managing agent for the group, negotiating the loan agreement, then coordinating the documentation process, the loan closing, the funding of loan advances, and the administration of repayments. The agent collects a fee for these services.The syndicate members typically will have less interaction with the borrower than the lead bank over the life of the loan. Consequently, the benefits of an on-going relationship as a means of resolving agency problems are less operative for the participating members, save for relationships based on prior transactions with the borrower in question.Agent banks have several potential motivations for syndicating loans. Regulators limit the maximum size of any single loan to a portion of the bank’s equity capital, so syndication can be a method to avoid “overlining.” Syndicationalso may reflect a voluntary diversification motive, a mechanism for managing interest rate risk, or a strategy for enhancing fee income. Participating banks may be motivated by a lack of origination capabilities in certain geographic regions or in certain types of transactions or a desire to economize on origination costs. Pennachi (1988) suggests that loan purchasing banks may have funding advantages relative to originators.The agent bank commonly issues a commitment letter to a borrower in which it may commit to fund an entire loan facility, or alternatively some portion thereof, with a promise to use “good faith efforts” to arrange commitments from other lenders for the remainder. If the agent commits for the entire amount, the loan can be syndicated after it is closed, to the advantage of the borrower in the sense that the funds are received more promptly.3 Otherwise, the loan must be syndicated prior to closing. The agent bank prepares an “information memorandum” that contains descriptive and financial information concerning the borrower (including projections of cash flows). Recipients of the memorandum sign a confidentiality agreement. The agent typically will meet with prospective members to explain the terms of the credit, describe the borrower’s business and prospects (often with presentations by the borrower’s management), and answer questions.The agent bank negotiates and drafts all the loan documents, but syndicate participants can provide comments and suggestions when the syndication occurs prior to closing. The participants are not generally involved in the negotiations with the borrower, however. Acting as an intermediary, theagent bank attempts to satisfy the potentially competing objectives of the borrower and syndicate members.The agent bank also facilitates the administration of the loan, typically acting as a middleman for draws upon and repayment of the loan. The agent calculates required interest payments, obtains waivers and amendments to the loan documents, and in the case of a secured loan, holds all pledged collateral (or is the grantee of relevant security interests) on behalf of the syndicate members. The agent bank collects a fee for its services, which typically falls in range of 10 to 40 basis points as a percentage of the facility. In some transactions, the roles of the agent are divided among several institutions. A “lead bank” negotiates the documents, puts together the syndicate, and closes the loan and an “administrative agent” handles post-closing loan administration. On occasion, a “collateral agent” is designated to monitor and administer the collateral backing the loan. Fees are split in the case of multiple agents.The “agency section” of the syndicated loan agreement formally designates the agent bank and will provide for its removal under specified conditions. The language typically exculpates the agent from any potential liability to the syndicate members except where it results from “gross negligence or willful misconduct.” While the language is crafted to temper or negate the presence of a fiduciary duty on the part of the agent, attorneys typically counsel the agent to administer the credit in good faith and exercise prudence and reasonableness.4 Although standard provisions permit the agent to declare an event of default, typically the agent will seek the prior advice of the memberbanks. Indeed, the loan agreement will identify which decisions require the consent of a designated proportion of the member banks. Unanimity is normally required for any reduction in principal, interest or fees or for extensions of any terms of the credit. In brief, the syndicate participants delegate some monitoring responsibilities to the managing agent both at the loan origination or due diligence stage and at the post-closing loan review stage.5The loan syndication market invites potential agency problems involving both adverse selection and moral hazard. The agent bank may possess information unavailable to the syndicate participants. If the borrower is a long-time customer, the originating agent bank may have obtained idiosyncratic information regarding prospective performance that is not reflected in financial statement data. Examples of such might involve judgments concerning management expertise, the nature of customer-supplier relationships, or the borrower’s capacity to adapt successfully to changing market conditions. The originating bank has an incentive to syndicate those loans on which its “inside information” is less favorable, to the potential economic detriment of the participant banks.As Gorton and Pennachi (1995) and others have noted, sales of loans also generate potential moral hazard problems, since the seller has less incentive to monitor once the loan is removed from the balance sheet. Monitoring is a costly activity, but after the sale of a loan the benefits accrue to the buyer rather than the loan originator. The moral hazard problem is potentially less severe in the case of a loan syndication than a loan sale, since thepurchasing bank in a syndication holds a note against the borrower and has the right to setoff against deposits. Nonetheless, the participating members have delegated some monitoring responsibilities to the agent bank, in the sense that members rely on the agent’s loan documentation, its enforcement of covenants, and its administration of collateral. As the agent syndicates a larger proportion of an individual loan, its incentive to monitor ex post declines monotonically. In some instances, the agent bank will syndicate the entire amount of a loan facility.These “information asymmetries” between the agent bank and syndicate members are quite similar in nature to those which have been used to motivate the existence of financial intermediaries. Intermediaries have been shown to have a comparative advantage in solving these agency-related problems. (See Bhattacharya and Thakor (1993) for a survey of this “existence” literature). How are these similar problems overcome in the context of loan syndications? And what do the “solutions” to these problems imply about where syndications “fit” in the information spectrum? We hypothesize that the factors which determine when a loan can be syndicated include the characteristics of (1) the borrower, (2) the agent bank, and (3) the loan contract itself.Research on loan syndications is relatively limited. In the only paper we could uncover in a literature search, Simons (1993) examines empirically the motives for syndications and addresses the issue of whether managing agents are likely to “exploit” the syndicate member banks. She reports that the capital position of the agent bank is a major factor affecting syndication activity and suggests that diversification is the primary motive for syndication. Using bankexaminer ratings for the syndicated loans in her sample, Simons finds that managing agents syndicate larger percentages of individual loans as the examiner ratings improve.6 These ratings represent ex post evaluations of loan quality, but Simons suggests “these loans may look less attractive to participants even before they are criticized by examiners “ and that “the lead banks concern with maintaining their reputations in the marketplace may lead them not only to avoid abuses, but to promote risky loans even less aggressively than safe loans”(p. 49). We investigate these and other issues more broadly and systematically in our study, with a sample that includes non-syndicated as well as syndicated loans. Simons’ sample consists only of syndicated loans.II. Factors Affecting Loan SyndicationsWe specify a model that identifies the factors that determine whether a loan is likely to be syndicated and, if so, to what extent. Our dependent variable, the percentage of a particular loan that is syndicated, is somewhat similar to that of Gorton and Pennachi (1995), who examine the proportion of a loan that is sold. Their sample consisted strictly of loans sold, however. Our sample includes non-syndicated loans, which assume a value of zero. The proportion of a loan that will be syndicated depends generally on the agent’s underlying motives for selling and on the scope of the agency problems associated with syndication. Accordingly, variables that reflect potential information asymmetries are a critical part of the model, as are variables that represent potential solutionsto these problems. Some of the latter variables may be captured in certain characteristics of the individual loan, although some loan attributes—such as loan size—may be related to the underlying motivations for syndication. Similarly, certain characteristics of the agent bank may affect the syndication potential of a given loan, either as a mechanism for resolving agency problems or as a reflection of the underlying motives for syndications.Pennachi (1988) demonstrates how agency problems limit loan sales in the sense that a seller’s ability to market loans depends on the buyer’s perception of the seller’s incentive to monitor. Pennachi argues that when the benefits to monitoring are negligible, a loan can be sold in its entirety. Greenbaum and Thakor (1987) demonstrate formally that, under certain conditions, banks will sell or securitize higher-quality assets and retain lower-quality loans on their balance sheets. Mester (1992) presents evidence suggesting that it is less costly for a bank to monitor a loan that it has originated compared to a loan that it has purchased. The implication of this research is that loans that involve information which is “transparent” (easy to access, process, and interpret) have higher syndication potential than loans involving “opaque”(fuzzy, incomplete, difficult to observe and interpret) information. We employ several different measures of the quality of the information available in a specific loan transaction, including the existence of a public credit rating (either a bond rating or a commercial paper rating), whether the borrower is a publicly-listed firm, and the annual sales of the borrower in the year the loan closed. We argue that information is likely to be more transparent when the borrower has a creditrating or is a listed firm or when the borrower is large (as reflected in annual sales). Increased transparency in turn raises the likelihood that a larger proportion of a particular loan can be syndicated.Certain characteristics of the loan itself may affect the agent bank’s capacity to syndicate either because the characteristic serves to attenuate agency costs or because it influences the perceived value to the buyer for non-agency related reasons. The maturity and the status of the loan with respect to collateral are two such characteristics. A number of potential channels exist that might affect a loan’s syndication potential and the likely impacts are not uni-directional.If there is significant potential for the lead/agent bank to exploit the syndicate members, then keeping loan maturity short could serve to minimize such a prospect. Short-term loans involve less opportunity for the agent bank to shirk, for example, and short maturities are likely to involve frequent requests for renewals, which triggers more frequent monitoring of the borrower and the agent by the syndicate members. Gorton and Pennachi (1989) argue that “banks are less likely to shirk in information production or covenant monitoring” when selling loan “strips,” which are short-term segments of longer-term loans (p. 130). The reason is that the selling bank intends to resell the strip on the date it matures to avoid having to fund it. These arguments suggest that lengthening a loan’s maturity would reduce its potential for successful syndication. On the other hand, frequent renewals also increase the overall (and duplicative) monitoring costs for the set of syndicate banks. Diamond (1984) demonstrates how the avoidance ofduplicative monitoring costs helps provide a rationale for the existence of financial intermediaries. Syndication results in duplicative monitoring by its very nature. Since the majority of syndicated loans involve variable-rate pricing, which minimizes interest rate risk, syndicate members might prefer longer-term claims on the borrower’s cash flows to avoid “excessive” monitoring costs. In addition, Rajan (1992) has emphasized that short-maturity loans create an opportunity for the originating bank to extract rents from borrowers on the renewal date whenever ex post information reveals a favorable state. If this is the case, managing agents would prefer to hold larger proportions of such loans in their own portfolios to avoid sharing such rents with syndicate members. If avoiding duplicative monitoring costs or potential rent extractions are relevant considerations, then lengthening a loan’s maturity would enhance its syndication potential. We include the loan’s maturity as a variable in our model, but the likely sign of this variable is ambiguous.Similarly, the presence of collateral could, in principle, increase or reduce a loan’s syndication potential. When a loan is fully secured, the quality of the lenders’ monitoring effort assumes less importance. Collateral accordingly reduces the sensitivity of the loan’s cash flows to any information differences between the agent and syndicate member banks, suggesting that the presence of collateral would raise the likelihood that a loan could be syndicated. On the other hand, Berger and Udell (1990) demonstrate that collateral typically is associated with riskier loans. This suggests that collateral could serve as a signal that a particular loan involves a high degree of opaque information. Rajanand Winton (1995) demonstrate formally that collateral is more likely to be observed in loans to firms that need monitoring and that “collateralization of private debt will be correlated with financial distress at the firm level and poor business conditions at the aggregate level, both of which have empirical support”(p. 115-16). These arguments suggest that the presence of collateral should reduce the prospects of syndicating a loan. We include a dummy variable for the presence of collateral in our model, but again we are agnostic about its sign.If the agency problems between the agent and syndicate members are potentially significant, another factor that could attenuate these problems is the formation of a “reputation” for non-exploitative behavior by the lead bank. Reputation has been proposed as a general solution to agency problems in contracting in numerous settings, including audit quality [DeAngelo (1981)], bond ratings [Wakeman (1981)], dividends [ Easterbrook (1984)], underwriting [Booth and Smith (1986)], and the abnormal stock price response to loan agreement announcements [Billett, Flannery, and Garfinkel (1995)]. James (1992) emphasizes the role of relationship-specific assets in the pricing of underwriting services. He notes that underwriters obtain information while evaluating a potential issue that can be useful in underwriting subsequent offerings of the same firm. In addition, the “investment banker may also identify an informed client base for the firm’s stock which is also a durable transaction-specific asset”(p. 1687). These arguments carry over directly to loan underwriting in a syndicate context. A bank that has established transaction-specific assets (reputation) should have lower costs in syndicating loans than banks that haveeschewed such investments. Gorton and Haubrich (1990) argue that the reputation of the selling back may replace the selling bank’s equity as the mechanism to ensure performance in a loan sale with no recourse.In our model, we develop a proxy for “reputational capital” based on the assumption that a large volume of repeat business between an agent originator and a syndicate member reflects a relationship containing significant transaction-specific investments. Using data from a period prior to that used in our regressions, we determine the amount of repeat business generated by each syndicate manager by creating “client lists.” We proceed through the data chronologically by manager, summing the volume of loans sold to all members who enter into multiple syndicates with this lead bank. We use this variable as one measure of the reputation of the managing agent.This technique for measuring reputation could erroneously reflect serial correlation in syndications, in that these leading managers simply may have an established strategy to syndicate a large proportion of their loans. As an alternative measure of reputation, we employ the senior, unsecured debt rating of the agent bank. We hypothesize that a loan can be more readily syndicated when the lead bank has a higher credit rating. In addition, we include a dummy variable equal to one if the loan originator is a bank and zero for non-banks, as another reputational factor. Non-banks are relatively recent entrants into the syndication market as originators, and we hypothesize that banks have more “reputational capital” in the market than non-banks. This hypothesis would be confirmed by a positive coefficient on this dummy. Preece and Mullineaux (1994)。

股票交易词汇中英对照小编为大家整理了股票交易词汇中英对照，希望对你有帮助哦! 股票交易词汇中英对照：集资 Capital Raising楔形 Wedge溢价 Premium碎股 Odd Lot道氏理论 Dow Theory撇帐 Provisioning旗形 Flag熊市 Bear Market碟形底 Saucer Bottom碟形顶 Saucer Top增长股 Growth Stock箱形 Box亚当理论 Adam's Theory产负债表 Balance Sheet伦敦港股 London Market for Hong Kong Stocks债券风险溢价 Risk Premium for Bonds兑换率 Conversion Ratio国企股 H Stock国企指数 Hang Seng China Enterprises Index国内生产总值 Gross Domestic Product (GDP)圆形底 Rounding Bottom圆形顶 Rounding T op场外交易市场 Over-the-Counter (OTC)备兑认股证 Covered Warrants备兑证 Equity Warrants头肩底 Head and Shoulders Bottom头肩顶 Head and Shoulders Top实质利率 Real Interest Rate对冲 Hedge对冲比率 Hedge Ratio对冲基金 Hedge Fund岛形转向 Island Reversal挟仓 Cornering the Market损益表 Statement of Income换马 Switching斩仓 Stop Loss热钱 Hot Money现金户口 Cash Account红股 Bonus Share红筹股 Red Chip红筹指数 Hang Seng China-Affilated Corporation Index 纯利 Net Profit线形图 Line Chart结算价 Final Settlement Price综合财政报表 Consolidated Financial Statement联交所 Stock Exchange of Hong Kong Limited (SEHK) 联系汇率 Linked Exchange Rate营业额 Turnover蓝筹股 Blue Chip认沽期权 Put Options认股证 Warrants认购期权 Call Options证监会 Securities and Futures Commission (SFC)负债比率 Debt Ratio财务报表 Financial Statement货币政策 Monetary Policy货币发行局机制 Currency Board System 贴现率 Discount Rate贴现窗 Discount Window资本增值 Capital Gain资本减值 Capital Loss资产净值 Net Asset value (NAV)资产负债表 Balance Sheet转势 Reversal银团贷款 Syndicated Loans长方形 Rectangle长期负债 Long-term Liabilities长仓 Long Position阴阳烛 Candlestick Chart随机走势假设 Random Walk Hypothesis 随机走势理论 Random Walk Theory随机指数 Stochastic风险 Risk风险溢价 Risk PremiumH股 H Stock一篮子备兑证 Basket Covered Warrants 入限价买盘 Buy Limit Order三角形 Triangle三底 Triple Bottoms三顶 Triple Tops下降楔形 Falling Wedge下降旗形 Falling Flag下降轨 Downward Trendline下跌风险 Downside Risk上升楔形 Rising Wedge上升旗形 Rising Flag上升轨 Upward Trendline上升风险 Upside Risk大手成交 Large Transaction大利市机 Teletext中央结算系统 Central Clearing and Settlement System 互惠基金 Mutual Funds分拆 Spin-off升水 Premium引伸波幅 Implied Volatility手 Lot Size支持线 Support Line止蚀盘 Stop Loss Order止赚盘 Stop Profit Order牛市 Bull Market出限价沽盘 Sell Limit Order可换股债券 Convertible Bonds市价盘 Market Order市盈率 Price-to-earnings Ratio (P/E Ratio)平价 At the Money未平仓合约 Open Interest未平仓合约 Open Interest生产物价指数 Producer Price Index (PPI)生产物价指数 Producer Price Index, PPI交叉盘 Cross Trade名义利率 Nominal Interest Rate合并 Merger回报 Return成分股 Constituent Stock成交量 Volume收市价 Closing Price老鼠仓 Rat Trading自动对盘 Automatching行使价 Exercise Price优先股 Preferred Stock价外 Out of the Money价内 In the Money孖展户口 Margin Account庄家 Market Maker低水 Discount利率 Interest Rate即日鲜 Day Trading批股 Share Placement折让 Discount投资组合理论 Portfolio Theory投资银行 Investment Banker杠杆比率 Gearing Ratio每日波幅限额 Daily Fluctuation Limit 系统性风险 Systematic Risk供股 Right Issue供股 Right Issue供股权 Rights固定资产 Fixed Asset定息债券 Fixed Income Securities 所有普通股指数 All-Ordinaries Index 招股书 Prospectus拋空 Short Sale拆出利率 Offer Rate注资 Asset Injection沽空 Short Sale波浪理论 Wave Theory波幅 Volatility股市指数 Stock Index股份回购 Share Buyback/Repurchase股息 Dividend股票市场 Stock Market股票孖展 Share Margin股东股本利益Shareholer’s Equity金管局 Hong Kong Monetary Authority阻力区 Resistance Level阻力线 Resistance Line信贷评级机构 Credit Rating Institution按金户口指数备兑证 Index Covered Warrants柱状图 Bar Chart流动比率 Current Ratio流动负债 Current Liabilities流动资产 Current Asset相反理论 Contrarian Theory美国联邦贴现率 Federal Discount Rate背驰 Divergence衍生工具 Derivatives限价盘 Limit Order香港银行同业拆息 Hong Kong Interbank Offer Rate (HIBOR) 恒生一百指数 Hang Seng 100 Index恒生中国企业指数Hand Seng China-affiliated Corp Index (HSCCI)恒生中资企业指数 Hang Seng China Enterprises Index (HSCEI) 恒生五十中型股指数 Hang Seng Midcap 50 Index恒生指数 Hang Seng Index套戥 Arbitrage息率 Dividend Yield效率市场假设 Efficient Market Hypothesis核数师意见 Auditor Opinion消费物价指数 Consumer Price Index (CPI)特殊项目 Exceptional Items特别成交 Special Trade神奇数字 Fibonacci Number追击手 Raider除息 Ex-dividend除净 Ex-all除权 Ex-right高水 Premium停版 Limit停牌 Suspension商人银行 Merchant Banker啤打系数 Beta Coefficient基本利率 Base Rate球 Million Share移动平均线 Moving Average第一市场 Primary Market第一市场直接批股 Direct Placement第二市场 Secondary Market通胀 Inflation最优惠利率 Prime Rate循环理论 Cyclical Theory普通股 Common Stock期交所 Hong Kong Futures Exchange Limited (HKFE) 期权 Options期货 Futures期货合约 Futures Contract程序买卖 Programme Trading裂口 Gap超买 Over Bought超卖 Over Sold内幕交易 Insider Trading单日转向 One-day Reversal单位信托基金 Unit Trusts双底 Double Bottoms双顶 Double Tops国民生产总值 Gross National Product (GNP)。

Chapter 3International Financial Markets Lecture OutlineMotives for Using International Financial Markets Motives for Investing in Foreign MarketsMotives for Providing Credit in Foreign MarketsMotives for Borrowing in Foreign MarketsForeign Exchange MarketHistory of Foreign ExchangeForeign Exchange TransactionsExchange QuotationsForeignInterpretingCurrency Futures and Options MarketsInternational Money MarketOrigins and DevelopmentStandardizing Global Bank RegulationsInternational Credit MarketSyndicated LoansInternational Bond MarketEurobond MarketDevelopment of Other Bond MarketsComparing Interest Rates Among CurrenciesInternational Stock MarketsIssuance of Foreign Stock in the U.S.Issuance of Stock in Foreign MarketsComparison of International Financial MarketsHow Financial Markets Affect an MNC’s ValueChapter ThemeThis chapter identifies and discusses the various international financial markets used by MNCs. These markets facilitate day-to-day operations of MNCs, including foreign exchange transactions, investing in foreign markets, and borrowing in foreign markets.Topics to Stimulate Class Discussion1. Why do international financial markets exist?2. How do banks serve international financial markets?3. Which international financial markets are most important to a firm that consistently needsshort-term funds? What about a firm that needs long-term funds?Critical debateShould firms that go public engage in international offerings?Proposition Yes. When a firm issues shares to the public for the first time in an initial public offering (IPO), it is naturally concerned about whether it can place all of its shares at a reasonable price. It will be able to issue its shares at a higher price by attracting more investors. It will increase its demand by spreading the shares across countries. The higher the price at which it can issue shares, the lower is its cost of using equity capital. It can also establish a global name by spreading shares across countries.Opposing view No. If a firm spreads its shares across different countries at the time of the IPO, there will be less publicly traded shares in the home country. Thus, it will not have as much liquidity in the secondary market. Investors desire shares that they can easily sell in the secondary market, which means that they require that the shares have liquidity. To the extent that a firm reduces its liquidity in the home country by spreading its share across countries, it may not attract sufficient home demand for the shares. Thus, its efforts to create global name recognition may reduce its name recognition in the home country.With whom do you agree? State your reasons. Use InfoTrac or some other search engine to learn more about this issue. Which argument do you support? Offer your own opinion on this issue.ANSWER: The key is that students recognize the tradeoff involved. A firm that engages in a relatively small IPO will have limited liquidity even when all of the stock is issued in the home country. Thus, it should not consider issuing stock internationally. However, firms with larger stock offerings may be in a position to issue a portion of their shares outside the home country. They should not spread the stocks across several countries, but perhaps should target one or two countries where they conduct substantial business. They want to ensure sufficient liquidity in each of the foreign countries where they sell shares.Stock Markets are inefficientPropositionI cannot believe that if the value of the euro in terms of, say, the British pound increases three days in a row, on the fourth day there is still a 50:50 chance that it will go up or down in value. I think that most investors will see a trend and will buy, therefore the price is morelikely to go up. Also, if the forward market predicts a rise in value, on average, surely it is going to rise in value. In other words, currency prices are predictable. And finally, if it were so unpredictable and therefore unprofitable to the speculator, how is it that there is such a vast sum of money being traded every day for speculative purposes – there is no smoke without fire.The simple answer is that if that is what you believe, buy currencies that have viewOpposingincreased three days in a row and on average you should make a profit, buy currencies where the forward market shows an increase in value. The fact is that there are a lot of investors with just your sort of views. The market traders know all about such beliefs and will price the currency so that such easy profit (their loss) cannot be made. Look at past currency rates for yourself, check all fourth day changes after three days of rises, any difference is going to be not enough to cover transaction costs or trading expenses and the slight inaccuracy in your figures which are likely to be closing day mid point of the bid/ask spread. No, all currency movements are related to information and no-one knows if tomorrows news will be better or worse than expected.With whom do you agree? Could there be undiscovered patterns? Could some movements not be related to information? Could some private news be leaking out?ANSWER: Clearly there are no obvious patterns. Discussion on the impossibility of obvious patterns is worth emphasizing. However, does market inefficiency necessarily involve patterns, could market manipulation be occasional. There is worrying evidence from share price movements that there is unusual movement before announcements on many occasions, so the ideathat traders do not occasionally collude and move the price without supporting economic evidence is not an unreasonable view. Proof is however difficult as we have to separate anticipation from prior knowledge, the lucky speculator from the speculator who was in the know.Answers to End of Chapter Questions1. Motives for Investing in Foreign Money Markets. Explain why an MNC may invest fundsin a financial market outside its own country.ANSWER: The MNC may be able to earn a higher interest rate on funds invested in a financial market outside of its own country. In addition, the exchange rate of the currency involved may be expected to appreciate.2. Motives for Providing Credit in Foreign Markets. Explain why some financial institutionsprefer to provide credit in financial markets outside their own country.ANSWER: Financial institutions may believe that they can earn a higher return by providing credit in foreign financial markets if interest rate levels are higher and if the economic conditions are strong so that the risk of default on credit provided is low. The institutions may also want to diversity their credit so that they are not too exposed to the economic conditions in any single country.3. Exchange Rate Effects on Investing. Explain how the appreciation of the Australian dollaragainst the euro would affect the return to a French firm that invested in an Australian money market security.ANSWER: If the Australian dollar appreciates over the investment period, this implies that the French firm purchased the Australian dollars to make its investment at a lower exchange rate than the rate at which it will convert A$ to euros when the investment period is over.Thus, it benefits from the appreciation. Its return will be higher as a result of this appreciation.4. Exchange Rate Effects on Borrowing. Explain how the appreciation of the Japanese yenagainst the UK pound would affect the return to a UK firm that borrowed Japanese yen and used the proceeds for a UK project.ANSWER: If the Japanese yen appreciates over the borrowing period, this implies that the UK firm converted yen to pounds at a lower exchange rate than the rate at which it paid for yen at the time it would repay the loan. Thus, it is adversely affected by the appreciation. Its cost of borrowing will be higher as a result of this appreciation.5. Bank Services. List some of the important characteristics of bank foreign exchange servicesthat MNCs should consider.ANSWER: The important characteristics are (1) competitiveness of the quote, (2) the firm’s relationship with the bank, (3) speed of execution, (4) advice about current market conditions, and (5) forecasting advice.6. Bid/ask Spread. Delay Bank’s bid price for US dollars is £0.53 and its ask price is £0.55.What is the bid/ask percentage spread?ANSWER: (£0.55– £0.53)/£0.55 = .036 or 3.6%7. Bid/ask Spread. Compute the bid/ask percentage spread for Mexican peso in which the askrate is 20.6 New peso to the dollar and the bid rate is 21.5 New peso to the dollar.ANSWER: direct rates are 1/20.6 = $0.485:1 peso as the ask rate and 1/21.5 = $0.465:1 peso as the bid rate so the spread is[($0.485 – $0.465)/$0.485] = .041, or 4.1%. Note that the spread is fro the Mexiccan peso not the dollar.8. Forward Contract. The Wolfpack ltd is a UK exporter that invoices its exports to the UnitedStates in dollars. If it expects that the dollar will appreciate against the pound in the future, should it hedge its exports with a forward contract? Explain..ANSWER: The forward contract can hedge future receivables or payables in foreign currencies to insulate the firm against exchange rate risk. Yet, in this case, the Wolfpack Corporation should not hedge because it would benefit from appreciation of the dollar when it converts the dollars to pounds.9. Euro. Explain the foreign exchange situation for countries that use the euro when theyengage in international trade among themselves.ANSWER: There is no foreign exchange. Euros are used as the medium of exchange.10. Indirect Exchange Rate. If the direct exchange rate of the euro is worth £0.685, what is theindirect rate of the euro? That is, what is the value of a pound in euros?ANSWER: 1/0.685 = 1.46 euros.11. Cross Exchange Rate. Assume Poland’s currency (the zloty) is worth £0.17 and theJapanese yen is worth £0.005. What is the cross (implied) rate of the zloty with respect to yen?ANSWER: £0.17/£0.005 = 34 zloty:1 yen12. Syndicated Loans. Explain how syndicated loans are used in international markets.ANSWER: A large MNC may want to obtain a large loan that no single bank wants to accommodate by itself. Thus, a bank may create a syndicate whereby several other banks also participate in the loan.13. Loan Rates. Explain the process used by banks in the Eurocredit market to determine the rateto charge on loans.ANSWER: Banks set the loan rate based on the prevailing LIBOR, and allow the loan rate to float (change every 6 months) in accordance with changes in LIBOR.14. International Markets. What is the function of the international money market? Brieflydescribe the reasons for the development and growth of the European money market. Explain how the international money, credit, and bond markets differ from one another.ANSWER: The function of the international money market is to efficiently facilitate the flow of international funds from firms or governments with excess funds to those in need of funds.Growth of the European money market was largely due to (1) regulations in the U.S. that limited foreign lending by U.S. banks; and (2) regulated ceilings placed on interest rates of dollar deposits in the U.S. that encouraged deposits to be placed in the Eurocurrency market where ceilings were nonexistent.The international money market focuses on short-term deposits and loans, while the international credit market is used to tap medium-term loans, and the international bond market is used to obtain long-term funds (by issuing long-term bonds).15. Evolution of Floating Rates. Briefly describe the historical developments that led to floatingexchange rates as of 1973.ANSWER: Country governments had difficulty in maintaining fixed exchange rates. In 1971, the bands were widened. Yet, the difficulty of controlling exchange rates even within these wider bands continued. As of 1973, the bands were eliminated so that rates could respond to market forces without limits (although governments still did intervene periodically).16. International Diversification. Explain how the Asian crisis would have affected the returnsto a UK. firm investing in the Asian stock markets as a means of international diversification.[See the chapter appendix.]ANSWER: The returns to the UK firm would have been reduced substantially as a result of the Asian crisis because of both declines in the Asian stock markets and because of currency depreciation. For example, the Indonesian stock market declined by about 27% from June 1997 to June 1998. Furthermore, the Indonesian rupiah declined against the U.S. dollar by 84%.17.Eurocredit Loans.a.With regard to Eurocredit loans, who are the borrowers?b. Why would a bank desire to participate in syndicated Eurocredit loans?c. What is LIBOR and how is it used in the Eurocredit market?ANSWER:a. Large corporations and some government agencies commonly request Eurocredit loans.b. With a Eurocredit loan, no single bank would be totally exposed to the risk that theborrower may fail to repay the loan. The risk is spread among all lending banks within the syndicate.c. LIBOR (London interbank offer rate) is the rate of interest at which banks in Europe lendto each other. It is used as a base from which loan rates on other loans are determined in the Eurocredit market.18. Foreign Exchange. You just came back from Canada, where the Canadian dollar was worth£0.43. You still have C$200 from your trip and could exchange them for pounds at the airport, but the airport foreign exchange desk will only buy them for £0.40. Next week, you will be going to Mexico and will need pesos. The airport foreign exchange desk will sell you pesos for £0.055 per peso. You met a tourist at the airport who is from Mexico and is on his way to Canada. He is willing to buy your C$200 for 1500 New Pesos. Should you accept the offer or cash the Canadian dollars in at the airport? Explain.ANSWER: Exchange with the tourist. If you exchange the C$ for pesos at the foreign exchange desk, the C$200 is multiplied by £0.40 and then divided by £0.055 ie a ratio of £0.40/0.055 = 7.27 pesos to the C$. The total pesos would be 200 x 7.27 = 1454 pesos, a little less than is being offered by the tourist.19. Foreign Stock Markets. Explain why firms may issue stock in foreign markets. Why mightMNCs issue more stock in Europe since the conversion to a single currency in 1999?ANSWER: Firms may issue stock in foreign markets when they are concerned that their home market may be unable to absorb the entire issue. In addition, these firms may have foreign currency inflows in the foreign country that can be used to pay dividends on foreign-issued stock. They may also desire to enhance their global image. Since the euro can be used in several countries, firms may need a large amount of euros if they are expanding across Europe.20. Stock Market Integration. Bullet plc a UK firm, is planning to issue new shares on theLondon Stock Exchange this month. The only decision still to be made is the specific day on which the shares will be issued. Why do you think Bullet monitors results of the Tokyo stock market every morning?ANSWER: The UK stock market prices sometimes follow Japanese market prices. Thus, the firm would possibly be able to issue its stock at a higher price in the UK if it can use the Japanese market as an indicator of what will happen in the UK market. However, this indicator will not always be accurate.Advanced Questions21. Effects of September 11. Why do you think the terrorist attack on the U.S. was expected tocause a decline in U.S. interest rates? Given the expectations for a potential decline in U.S.interest rates and stock prices, how were capital flows between the U.S. and other countries likely affected?ANSWER: The attack was expected to cause a weaker economy, which would result in lower U.S. interest rates. Given the lower interest rates, and the weak stock prices, the amount of funds invested by foreign investors in U.S. securities would be reduced.22. International Financial Markets. Carrefour the French Supermarket chain has established retail outlets worldwide. These outlets are massive and contain products purchased locally as well as imports. As Carrefour generates earnings beyond what it needs abroad, it may remit those earnings back to France. Carrefour is likely to build additional outlets especially in China.a. Explain how the Carrefour outlets in China would use the spot market in foreign exchange.ANSWER:The Carrefour stores in China need other currencies to buy products from other countries, and must convert the Chinese currency (yuan) into the other currencies in the spot market to purchase these products. They also could use the spot market to convert excess earnings denominated in yuan into euros, which would be remitted to the French parent.b. Explain how Carrefour might utilize the international money markets when it isestablishing other Carrefour stores in Asia.ANSWER: Carrefour may need to maintain some deposits in the Eurocurrency market that can be used (when needed) to support the growth of Carrefour stores in various foreign markets. When some Carrefour stores in foreign markets need funds, they borrow from banks in the Eurocurrency market. Thus, the Eurocurrency market serves as a deposit or lending source for Carrefour and other MNCs on a short-term basis. (Eurocurrency refers to international currencies, most likely the dollar, not just the euro!)c. Explain how Carrefour could use the international bond market to finance theestablishment of new outlets in foreign markets.ANSWER: Carrefour could issue bonds in the Eurobond market to generate funds needed to establish new outlets. The bonds may be denominated in the currency that is needed; then, once the stores are established, some of the cash flows generated by those stores could be used to pay interest on the bonds.23.Interest Rates. Why do interest rates vary among countries? Why are interest rates normallysimilar for those European countries that use the euro as their currency? Offer a reason why the government interest rate of one country could be slightly higher than that of the government interest rate of another country, even though the euro is the currency used in both countries.ANSWER: Interest rates in each country are based on the supply of funds and demand for funds for a given currency. However, the supply and demand conditions for the euro are dictated by all participating countries in aggregate, and do not vary among participating countries. Yet, the government interest rate in one country that uses the euro could be slightly higher than others that use the euro if it is subject to default risk. The higher interest rate would reflect a risk premium.Blades plc Case Study。

The role of information asymmetry and financial reporting quality in debt contracting:Evidence from the secondary loan market*Regina Wittenberg Moerman§First version: December 2004This version: December 2005AbstractI employ unique data on secondary loan trades to explore how information asymmetry and thequality of financial reporting affect the trading spreads of private debt securities. There are twoprimary findings. First, the bid-ask spread in secondary loan trading is positively related to firm-and loan-specific characteristics associated with a high information asymmetry environment.Loans of private firms, loans without an available credit rating, loans syndicated by less reputablearrangers, distressed loans, and loans of loss firms are traded at significantly higher bid-askspreads. Second,timely incorporation of economic losses into borrowers’ financial statementsreduces the bid-ask spread at which their loans are traded. This finding suggests that high qualityfinancial reporting reduces the information costs associated with debt agreements and increasesthe efficiency of the secondary trade.*I am especially grateful to the members of my dissertation committee: Ray Ball (Chair), PhilipBerger, Douglas Diamond, Douglas Skinner and Abbie Smith for many insightful comments andhelpful discussions. I also thank Zahi Ben-David, Steven Crawford, Ellen Engel, Wendy Heltzer,Eugene Kandel, Randall Kroszner, Darren Roulstone, Gil Sadka, Haresh Sapra, Tony Tang andparticipants in the University of Chicago Accounting Seminar and the University of ChicagoFinance Brown Bag for valuable comments and suggestions. I would like to thank the LoanPricing Corporation for letting me use their loan trading data. I gratefully acknowledge thefinancial support of the University of Chicago, Graduate School of Business.§Graduate School of Business, University of Chicago, 5807 S. Woodlawn Ave., Chicago, IL60637; email: rwittenb@1. IntroductionThe U.S. syndicated loan market bridges the private and public debt markets and provides borrowers and lenders with a highly valuable source of financing and investment. The market consists of a wide-range primary loan market, where syndicated loans1 are originated, and an active secondary market, where loans are traded after the close of primary syndication. In the past 20 years, the syndicated loan market has been one of the most rapidly growing and innovative sectors of the U.S. capital market (Yago and McCarty, 2004). U.S. firms obtain over $1 trillion in new syndicated loans each year, which represents more than 50 percent of the annual U.S. equity and debt issuance (Weidner, 2000). The trading of syndicated loans has expanded from $8 billion in 1991 to $144.6 billion in 2003, a compound annual growth rate of 27 percent.In this paper, I employ a sample of traded syndicated loans to explore two fundamental concepts in accounting and finance research: information asymmetry and financial reporting quality. The existing literature that examines information asymmetry does so mainly in a context of equity markets,2 leaving the role of information asymmetry in the debt markets largely unexplored. The secondary loan market is a promising empirical setting to examine information asymmetry because it involves trading of debt securities of both public and private firms. Moreover, the secondary loan market provides unique information regarding trading of private debt issues.The first contribution of this paper is to explore how information asymmetry, as reflected in firm- and loan-specific characteristics, affects secondary loan trading spreads. Prior research primarily addresses loan sales by investigating banks’ incentives for loan trading3 and by1 In the syndicated loan market a loan is identified as a “facility”. Usually, a number of facilities with different maturities, interest rate spreads and repayment schedules are structured and syndicated as one transaction (deal) with a borrower. The analysis in this paper is performed at the individual facility level.2 See, for example, Copeland and Galai (1983), Glosten and Milgrom (1985), Kyle (1985), Amihud and Mendelson (1986), Diamond and Verrecchia (1991), Botosan (1997), Leuz and Verrecchia (2000), Easley et al. (2002), Easley and O’Hara (2004), Ertimur (2004) and Schrand and Verrecchia (2005).3 See Pavel and Phillis (1987), Pennacchi (1988), Gorton and Pennacchi (1995), Froot and Stein (1998), Demsetz (2000) and Cebenoyan and Strahan (2004).examining returns and price formation across the loan, bond and equity markets4. To the best of my knowledge, this study is the first to examine the determinants of the bid-ask spread in the secondary loan market.The empirical findings confirm that the bid-ask spread in the secondary loan trade is positively related to firm- and loan-specific characteristics associated with a high information asymmetry environment. There is clear evidence that loans of private firms are traded at higher spreads than loans of publicly reporting firms. The bid-ask spread is also significantly higher on loans without an available credit rating. Emphasizing the dominant role of the arranger of syndication in resolving information asymmetry, the results indicate that loan spreads are higher for loans syndicated by less reputable arrangers. I also find that loans of loss firms are traded at significantly higher spreads than facilities of profitable ones. Furthermore, the stronger adverse selection associated with distressed loans is reflected in the higher trading spreads of these loans.The analysis presented in this paper enriches our understanding of how information asymmetry is resolved in trading of private debt securities. I identify the determinants of the efficiency of the secondary loan trade5 and quantify their impact on the trading spreads. While a number of these determinants are documented by prior research to be associated with information asymmetry, others address the specificity of trading on the secondary loan market. The empirical analysis employs unique characteristics of the information environment of syndicated loans, such as the reputation of the arranger of syndication, the identity of the lender (i.e., institutional investor or bank), the loan-specific ratings, and the distinction between both distressed6 and par loans and profit and loss borrowing firms. The analysis of the firm- and loan-specific characteristics associated with a high information asymmetry environment not only widens our4 See Allen et al. (2004), Altman et al. (2004), and Allen and Gottesman (2005).5 Copeland and Galai (1983), Glosten and Milgrom (1985) and Kyle (1985) confirm that information asymmetry between potential buyers and sellers introduces adverse selection and reduces the liquidity in the secondary markets. Following this line of research, by “more efficient secondary trading” I imply more liquid trading, which is reflected in relatively lower bid-ask spreads.6 According to the secondary loan market’s convention, distressed loans are loans traded at a bid price below 90 percent of the par value.understanding of the role of information asymmetry in loan trading, but it is also a necessary step for exploring the impact of financial reporting quality on trading of private debt securities.The second contribution of this paper is to examine how financial reporting quality affects loan trading on the secondary market. Studies of financial reporting quality have mainly focused on equity markets,7 although Watts and Zimmerman (1986), Watts (1993, 2003a,b) and Holthausen and Watts (2001) conclude that the reporting demands of the debt markets principally influence accounting reporting. Therefore, the secondary loan market is both a natural and an important empirical setting in which to examine the role of financial reporting quality. More specifically, I investigate how the quality of financial reporting affects loan trading spreads, with a particular emphasis on exploring the impact of timely loss recognition.Since debt holders’ returns are mainly determined by the downside region of a borrower’s earnings distribution, investors in debt securities are more sensitive to borrowers’ losses than to borrowers’ profits. In addition, timely loss recognition more quickly triggers ex-post violations of debt covenants based on financial statement variables. By triggering debt covenant violations, timely loss recognition allows lenders to more rapidly employ their decision rights following economic losses, which increases the efficiency of debt agreements (Ball, 2001, Watts, 2003a, and Ball and Shivakumar, 2005a). The asymmetric payoff function of investors in debt securities and the effect of timely loss recognition on the debt contracting efficiency make the secondary loan market an excellent empirical setting in which to explore the importance of timely loss recognition.The impact of timely loss recognition on debt agreements should be particularly important for private debt contracts because private debt issues typically contain more extensive covenants than do public debt issues (Smith and Warner, 1979). Previous literature also demonstrates that private lenders set debt covenants fairly tightly relative to the underlying financial variables,7 The exceptions include Sengupta (1998), Ahmed et al. (2002), Beatty et al. (2002), Bharath, Sunder and Sunder (2004), Zhang (2004) and Francis et al. (2005).especially when compared to the covenants set by public lenders (DeAngelo et al., 1994, Assender, 2000, Dichev et al., 2002, and Dichev and Skinner, 2002).These differences between private and public debt contracts make the secondary loan market an especially promising setting for an empirical analysis of how timely loss recognition affects debt agreements.I employ three measures of timely loss recognition. First, following Ball and Shivakumar (2005a,b), timely loss recognition is estimated by the coefficient on a firm’s negative cash flows in a piecewise-linear regression of accruals on cash flows.8 Second, following Basu (1997), the timeliness of income in reflecting economic losses is measured by the coefficient on the current year negative stock returns in a piecewise-linear regression of earnings on the contemporaneous stock returns. Estimating Basu’s (1997) model by industry-specific and firm-specific regressions provides two additional measures of timely loss recognition.I find evidence that timely incorporation of economic losses in borrowers’ financial statements reduces the bid-ask spread at which their loans are traded. The effect of timely loss recognition on the trading spreads is statistically and economically significant; the evidence is consistent across different measures of timely loss recognition. These empirical findings confirm that high quality financial reporting reduces the information costs associated with debt agreements and thus increases the efficiency of the secondary loan trade. To the best of my knowledge, this paper is the first to document and quantify the efficiency gain from timely loss recognition in trading of securities on secondary markets.Although accounting theory suggests that timely incorporation of economic losses enhances the efficiency of debt contracting, there is little empirical evidence supporting this proposition.9 By providing evidence that timely loss recognition decreases information asymmetry regarding the borrower, my paper confirms that conservative reporting creates efficiency gains in debt contracting.8 Because of data limitations, this estimation is performed at the industry level.9 The exceptions include Ahmed et al. (2002) and Zhang (2004), who document that timely incorporation of economic losses reduces the cost of debt capital.To further examine the impact of financial reporting quality on loan trading, I investigate the relation between the bid-ask spread and timely gain recognition, the overall timeliness of a borrower’s financial reporting, as measured by R2 of the Basu regression, and unconditional conservatism. The results demonstrate that these attributes of accounting reporting are not significantly related to the loan trading spread. These findings further support the special role timely loss recognition plays in debt contracting.I also examine whether abnormal accruals influence loan trading spreads.10 While I do not observe a significant relation between unsigned abnormal accruals and the bid-ask spread, I find a positive and significant relation between signed abnormal accruals and the loan spread. I interpret these results as evidence that managers choose income-increasing accounting procedures to avoid or to mitigate debt covenant violations. Secondary market participants perceive loans with binding covenants as being subject to higher information uncertainty and this is reflected in the higher spreads of these facilities. The high information asymmetry environment associated with loans subject to binding covenants might be driven by managers’ manipulative behavior, as well as by the general uncertainty regarding the borrower’s creditworthiness and liquidity.My interpretation of the positive relation between the loan bid-ask spread and the signed abnormal accruals is consistent with the “debt covenant” hypothesis that suggests that managers make accounting choices which decrease the likelihood of debt covenant violations (Watts and Zimmerman, 1986, Healy and Palepu, 1990, DeFond and Jiambalvo, 1994, Sweeney, 1994, and Dichev and Skinner, 2002). To strengthen the empirical findings, I conduct a detailed examination of the loan contracts of the loans in the highest decile of signed abnormal accruals. Consistent with the “debt covenant” hypothesis, I find that the majority of firms with high positive abnormal accruals either violate debt covenants or have corresponding financial measures which are only two to four percent higher than the covenant threshold.10 Abnormal accruals are estimated by the Jones (1991) model, adjusted for the incorporation of the negative cash flow indicator variable. This adjustment reflects the role of accruals in timely recognition of economic losses, as suggested by Ball and Shivakumar (2005b).I also examine earnings volatility which the literature sees as being associated with a firm’s information environment. I find a positive relation between bid-ask spread and earnings volatility.11 The significance of this relation is, however, sensitive to the earnings category employed in the analysis. This sensitivity is potentially explained by the equivocal relation between earnings volatility and the quality of financial reporting. Highly predictable and smooth earnings decrease uncertainty about the borrower. However, if managers report opportunistically to achieve lower earnings variability, earnings are less informative (Francis et al., 2004).The following section provides a brief description of the secondary loan market. The third section outlines the research hypotheses. The fourth section describes the data and summary statistics. The fifth section focuses on the research design. The sixth section discusses empirical findings. The seventh section concludes.2. The secondary loan market: Background and developmentSecondary loan sales occur after the close of primary syndication; loan sales are structured as either assignments or participations.12 When interests in the loan are transferred by assignment, the buyer becomes a direct signatory to the loan. In participation, the original lender remains the holder of the loan and the buyer takes a participating interest in the existing lender’s commitment (Standard &Poor’s, 2003). While assignments usually require the consent of both the borrower and the arranger for the loan sale, in participations such consents are almost never required. Today, loan sales are performed through loan trading desks in more than 30 institutions which act as the market makers in the secondary loan market (Taylor and Yang, 2004).The secondary loan market has grown rapidly in recent years, with trading volume increasing from $8 billion in 1991 to $144.6 billion in 2003 (Loan Pricing Corporation (LPC), 2003). The market expanded in both par and distressed loans; the trading volume of loans traded11 Earnings volatility is estimated relative to a firm’s volatility of cash flows (Leuz et al., 2003).12 The majority of the loan sales in the secondary loan market are performed via assignment.at par and of distressed loans reached $87 billion and $57 billion in 2003, respectively. Leveraged loans represent the largest and the fastest growing part of the secondary loan market.13 Since 2001, trading of leveraged loans has constituted 80 percent of the total value of par loan trades.The involvement of institutional investors in the secondary loan market has increased considerably with the market’s development. Banks, loan participation mutual funds (prime funds)14, Collateralized Loan Obligations (CLOs)15 and finance companies constitute the main secondary loan market participants. Additionally, hedge funds and pension funds are increasing their activity in loan trading (Yago and McCarty, 2004).Several reasons contributed to the strong growth in loan sales. New bank regulatory requirements, such as the 1989 Highly Leveraged Transaction guidelines and the 1988 Basel Capital Accord, encourage banks to decrease their credit risk exposure (Altman et al., 2004, and Barth et al, 2004). Additionally, the adoption of SEC Rule 144A in 1990 provided a safe-harbor relief from the registration requirements of Section 5 of the Securities Act of 1933 for the resale of privately held debt and equity securities to qualified institutional buyers (QIB) (Allen et al., 2004, Hugh and Wang, 2004, and Yago and McCarty, 2004).16 The foundation of the Loan Syndication and Trading Association (LSTA)17 in 1995 was an additional factor that stimulated the development of the secondary loan market (Hugh and Wang, 2004).Development of the secondary loan market coincided with improvements in the market’s transparency. In 1987, LPC initiated the publication of Gold Sheets which provide a detailed 13 LPC defines leveraged loans as loans rated below BBB- or Baa3 or unrated and priced at the spread equal or higher than 150 bps above Libor.14 Prime funds are mutual funds that invest in leveraged loans. For the most part, prime funds are continuously offered funds with quarterly tender periods or true closed-end, exchange-traded funds (Standard &Poor’s, 2003).15 The CLOs purchase assets subject to credit risk (such as syndicated loans and mainly leveraged syndicated loans), and securitize them as bonds of various degrees of creditworthiness.16 QIB is defined as an institution that owns and manages $100 million ($10 million in the case of a registered broker-dealer) or more in qualifying securities. For a banking institution to qualify as a QIB, a $25 million minimum net worth test must also be satisfied. The objective of Rule 144A is to increase the efficiency and liquidity of the U.S. market for equity and debt securities issued in private placements by allowing large institutional investors to trade restricted securities more freely with each other.17 LSTA is a not-for-profit organization dedicated to promoting the orderly development of a fair, efficient, liquid and professional trading market for corporate loans and other similar private debt ().analysis of the market trends, loan price indexes and news coverage. In the late nineties, LSTA created standard documentation for primary and secondary loan markets and, jointly with LPC, started providing mark-to-market loan pricing based upon dealer quotes (Yago and McCarty, 2004). These initiatives significantly increased the amount of information available to secondary loan market participants. In addition, Standard & Poor’s, Moody’s and Fitch-ICBA started rating corporate syndicated loans in 1995. The rapid increase in the number of rated loans considerably reduced information uncertainty in the secondary loan market.3. Research hypotheses3.1 Impact of information asymmetry on secondary loan tradingCopeland and Galai (1983), Glosten and Milgrom (1985) and Kyle (1985) confirm that information asymmetry between potential buyers and sellers introduces adverse selection into secondary markets and reduces market liquidity. Following these theoretical models, many papers rely on the bid-ask spread as the main measure of information asymmetry.18 Because private debt contracts are subject to high information asymmetry, I expect information asymmetry, as reflected in firm- and loan-specific characteristics, to significantly influence loan trading spreads.The majority of loan trading involves leveraged loans; borrowers with this credit rating spectrum are expected to rely mainly on bank monitoring (Diamond, 1991). Diamond (1984) establishes that banks provide unique services in the form of credit evaluation and the monitoring of borrowers.19 For a bank to have the incentive to provide these services, it seems necessary that it hold a significant fraction of each loan that it originates. Although prior research addresses a bank’s motivation to monitor a loan after a portion of the loan has been sold, the efficiency of the18 See, for example, Lee et al. (1993), Yohn (1998), Leuz and Verrecchia (2000), Kalimipalli and Warga (2002), Ertimur (2004) and Sadka and Sadka (2004).19 Lummer and McConnell (1989) further support the importance of bank monitoring. Their study suggests that a bank is not producing information upon first contact with a borrower; rather, it learns information or takes action later in a course of a loan.post-sale bank monitoring remains an open theoretical and empirical question (Pennacchi, 1988, Gorton and Pennacchi, 1995, and Gorton and Winton, 2000). Since the relative advantage of bank monitoring is significantly higher for loans subject to high information asymmetry, I expect these facilities to be traded at higher information costs on the secondary loan market.By monitoring a borrower, lenders typically get access to a firm’s private sources of information which indicate its creditworthiness. However, the trading of syndicated loans involves secondary loan market participants who do not possess information sources available to lenders holding a loan contract. Therefore, information asymmetry should considerably affect the bid-ask spreads in the loan trading.20 Additionally, most secondary loan market participants are large institutions, such as banks and institutional investors, and Diamond and Verrecchia (1991) demonstrate that large traders are especially concerned about liquidity.The significant impact of information asymmetry on secondary market trading and its particular importance in private debt contracting lead to the following research hypothesis: H1: The bid-ask spread in secondary loan trading is positively related to firm- and loan-specific characteristics associated with a high information asymmetry environment.First, I focus on variables which previous research suggests as being related to information asymmetry. Second, to address the specificity of trading on the secondary loan market, I explore the unique characteristics of the information environment of the syndicated loans.Publicly reporting vs. private firmsWhen a borrower does not report to the SEC, secondary market participants have less publicly available information regarding a borrower’s creditworthiness and profitability. In addition, private firms are not subject to the rigorous monitoring by market forces, such as the SEC, auditors, analysts and public exchanges. Private firms are also less subject to litigations20 This prediction is strengthened by Gorton and Pennacchi (1990), who show that trading losses associated with information asymmetries can be mitigated by designing securities which split the cash flows of underlying assets into safer and riskier cash flows. Their analysis implies that loans of borrowers with more transparent information should be more efficiently traded by the “uninformed investors”.related to financial reporting and disclosure. Therefore, investing in debt securities of private firms usually requires that the lender have a higher screening and monitoring ability.Diamond and Verrecchia (1991), Leuz and Verrecchia (2000) and Verrecchia (2001) establish that a commitment to higher disclosure quality reduces information asymmetry. Since public firms have an inherent commitment to higher disclosure levels compared to private firms, this information underscores how important public reporting is to the reduction of information asymmetry regarding the borrower. In addition, private firms have less conservative reporting than public firms (Ball and Shivakumar, 2005a), which further emphasizes important differences in their information environments. I expect public borrowers’ debt securities to be traded with less information costs on the secondary loan market. Firms with public reporting are identified by an indicator variable taking the value of one if a borrower is a publicly reporting firm in the year when the facility is traded on the secondary loan market, zero otherwise.Availability of public credit ratingIf an independent credit agency does an evaluation of the borrower’s credit quality, then the availability of this estimate is anticipated to be associated with a lower information asymmetry environment (Dennis and Mullineaux, 2000, Lee and Mullineaux, 2004, and Gonas et al., 2004). The significance of the availability of a credit rating is also supported by the theoretical model of Diamond (1991) which emphasizes the importance of publicly available information, such as credit ratings, to the lender-borrower relationship. The existence of a credit rating is measured by an indicator variable taking the value of one if a firm and/or facility has an available credit rating, zero otherwise. More specifically, I carefully account for all potentially available credit rating categories, including Moody’s Sr. Debt, Moody’s Loan Rating, S&P Sr. Debt, S&P Loan Rating, Fitch LT and Fitch Loan Rating.Loan sizeFollowing previous literature, I use loan size as an additional measure associated with the amount and quality of information available regarding a borrower. According to Jones et al.(2005), information asymmetries tend to be less severe for large loans, since any fixed costs associated with obtaining information about a borrower are less of an obstacle for large loans. Bharath, Dahiya, Saunders, and Srinivasan (2004) also suggest that small borrowers have greater information asymmetries, and a loan’s size is typically positively correlated with its borrower’s size. Additionally, Diamond and Verrecchia (1991) demonstrate that large firms receive a larger benefit from disclosure than small firms. Generally, firm size is a widely used proxy for the amount of public information available regarding a company (Harris, 1994). As a result, larger loans are anticipated to be associated with lower information asymmetry environment.Reputation of the arranger of syndicationTo address the arranger’s dominant role in resolving information asymmetry in the syndicated loan market, the analysis incorporates the reputation of the syndicated facility’s arranger. The arranger negotiates the loan agreement, coordinates the documentation process and the loan closing, recruits loan participants and arranges the administration of repayments (Dennis and Mullineaux, 2000, Panyagometh and Roberts, 2002, and Lee and Mullineaux, 2004). While there is technically an independent loan agreement between the borrower and each of the investors, in practice, the syndicate participants typically rely on the information provided by the arranging bank (Jones et al., 2005).21 Therefore, the arranger’s reputation is expected to be negatively associated with information costs in the secondary loan trade.The importance of the arranger’s reputation is further motivated by the empirical evidence that more reputable arrangers are more likely to syndicate loans and are able to sell off a larger portion of a loan to the syndicate participants (Dennis and Mullineaux, 2000, Panyagometh and Roberts, 2002, and Casolaro et al., 2004). The literature interprets these findings as consistent with the proposition that the arranger’s status is a certification of the borrower’s financial 21 Prior literature suggests that the arranger does not exploit asymmetric information to distribute lower-quality loans to syndicate participants. A number of studies find that the arranger holds larger proportions of information-problematic and riskier loans in its own portfolio (Simons, 1993, Dennis and Mullineaux, 2000, Lee and Mullineaux, 2004, Jones et al., 2005, and Sufi, 2005). In addition, the arranger has been found to syndicate a larger proportion of a loan subsequently upgraded (Panyagometh and Roberts, 2002).。

金融英语情景对话推荐文章金融英语口语情景对话常见练习热度：金融英语口语练习情景对话热度：金融英语办理银行业务情景对话热度：金融英语银行业务情景对话热度：金融英语经典情景对话热度：下面店铺为大家带来金融英语情景对话，欢迎大家学习!金融英语情景对话：房屋贷款Al and Virginia Baxter are talking to their banker ,T ony Flora ,about a housing loan.艾尔和弗吉尼亚·巴克斯特正和他们的银行家托尼·费洛拉洽谈有关房屋贷款之事。

Al:We'd like to get some information about mortgage loans,Mr.Flora.艾尔：我们希望得到一些有关抵押贷款方面的知识，弗洛拉先生。

We found a house that we'd like to buy.我们找到了一所我们想买的房子。

Flora:Well,Mr.Baxter,we generally lend 80% of the bank's appraised value on 30-,35-or 40-year mortgages if the house is less than 10 years old .弗洛拉：好的，巴克斯特先生。

如果房屋从建成至今尚未超过10年，我们一般借给买房者的数额是银行对房屋估价的80%，而贷款期为30、35或40年。

Baxter:Oh ,it's almost a brand-new house .I think it was built two years ago .巴克斯特：哦，这几乎是一所全新的房子，我认为是两年前修建的。

A:Yes,it's a real good deal .The price is just right .艾尔：是的，这真是的桩合适的买卖，价钱也很合理。

中华人民共和国各大银行的英文名称1、中国银行（BANK OF CHINA）简称BOC。

2、交通银行（Bank of Communications）简称BCM。

3、中国建设银行（China Construction Bank）简称BCC。

4、中国工商银行（INDUSTRIAL AND COMMERCIAL BANK OF CHINA）简称ICBC。

5、中国邮政储蓄银行（Postal Savings Bank of China）简称PSBC。

6、中国农业银行（AGRICULTURAL BANK OF CHINA）简称ABC。

7、农商银行（Rural Commercial Bank）简称RCB。

8、中国人民银行（The People's Bank Of China）简称PBC。

银行各部门词汇翻译：Aacceptance 承兑accepted draft/bill 已承兑汇票account for 说明account reconciliation 银行存款余额调节表account sales 承销清单account 科目，帐户accounting basis 会计基础accounting controls 会计控制，财务控制accounting equation 会计等式accrual accounting 权责发生制会计原则accrued basis 应计基础accrued income 应计收益accrued interest 应记利息accumulated fund 累积基金actual cost 实际成本adjustment 调整advances accounts 放款账户allocation 分配application and allotment 申请及分配apportionment 分摊appropriation account 盈余分拨帐articles of association 组织章程assets 资产Bbad debts 呆帐balance brought down 余额承上balance brought forward 余额承前balance carried down 余额转下balance sheet 资产负债表bank reconciliation statement 银行往来调节表base currency 基础货币bill of exchange, draft 汇票bill payable 应付票据bill receivable 应收票据book of original entry 原始分录簿bookkeeping 簿记business entity 企业个体Ccall 催缴股款called-up capital 己催缴股本capital employed 动用资金capital expenditure 资本支出capital redemption reserve fund 赎回资本准备金capital 资本cash basis accounting 收付实现制会计原则cash book 现金日记簿cash discount 现金折扣cash equivalents 现金等价物cash in hand 手存现金closing stock 期未存货compensating error 抵销性错误complete reversal of entries 记帐时借贷方互调conservatism 稳健保守consignee 承销人consignment account 寄销帐consignment 寄销consignor 寄销人consistency 一贯原则contingent liability 或有负债contra 对销cost accounting 成本会计cost of goods sold 销货成本credit advice 贷项通知单(银行用)credit note 贷项通知单credit period allowed to trade debtors 应收帐款赊帐期限credit period received form trade creditors 应付帐款赊帐期限credit 贷方creditor 债权人creditors ledger control account 应付帐款分类帐统制帐户creditors ledger 应付帐款分类帐current assets 流动资产current liabilities 流动负债current ratio 流动比率Ddaily trial balance 日试算平衡表debenture 债券debit advice 借项通知单(银行用)debit note 借项通知单debit 借方debtors ledger control account 应收帐款分类帐统制帐户debtors ledger 应收帐款分类帐deficit 亏空，赤字depreciation account method 折旧帐法depreciation provision account method 折旧准备帐法depreciation 折旧discount 贴现，折价discounting bill of exchange 票据贴现discounting charge 贴现手续费discounts allowed 销货折扣discounts received 购货折扣dishonoured bill 拒付票据double-entry bookkeeping 复式簿记doubtful debts 可疑帐户draft 汇票drawee 受票人drawer 出票人drawings account 业主提款帐drawings 业主提款Eendorsement 背书entity 会计主体expenses 费用Ffactory overhead 间接制造成本fee income 手续费收入final accounts 决算表financing activity 筹资活动finished goods 制成品fixed assets 固定资产foreign currency 外国货币foreign exchange transactions 外汇交易forfeiture 没收forward transactions 远期交易freehold premises 永久业权Ggeneral book of original entry 普通原始簿general journal 日记簿general ledger entry 总分类账分录general ledger 总分类帐general ledger 总分类账general provision 一般损失准备金going concern 持续经营goodwill 商誉gross loss 毛损gross profit ratio 毛利率gross profit 毛利Hhire purchase 租购historical cost 历史成本holder 持票人honour the bill of exchange 结算票据Iincome determination 损益计算interest income 利息收入investing activity 投资活动investment security 投资证券invoice 发票issued at par 平价发行issued at premium 溢价发行issued capital 已发行股本Jjoint venture 合营企业journal 日记簿Lledger 分类帐legal person 法人liabilities 负债liquidity ratio 流动性比率local currency equivalent 等值货币local currency 当地货币long-term liabilities 长期负债Mmargin 毛利率mark-up 加成match 配比materiality 重要性memorandum 备忘modified cash basis accounting 修正的收付实现制会计原则monthly statement 月结单Nnatural currency 实际货币net current assets（working ) 净流动资产(营运资金）net loss 净损失net profit ratio 净利率net profit 纯利net purchases 购货净额net sales 销货净额nominal account 虚帐户nostro accounts 往账科目Oopening entries 开帐分录opening stock 期初存货operating activity 经营活动option 期权ordinary shares 普通股overdraft 透支overhead , ; 间接费用ownership 所有权Ppaid-up capital 己缴股本par value 票面值partnership 合伙企业patent 专利权perpetual inventory method 永续盘存法petty cash book 零用现金簿petty cash voucher 零用现金凭单posting 过帐preference shares 优先股premium 溢价prepaid expenses 预付费用prime cost 主要成本pro rata 按比例分配profit and loss account 损益帐provision for bad debts 坏帐准备prudence 稳健保守purchases account 购货帐purchases journal 购货日记簿purchases ledger control account 应付帐款分类帐控制帐户purchases ledger 应付帐款分类帐Rreal account 实帐户receipt in advance 预收款项receipts and payments account 现金收付日记帐reconciliation report 银行存款调节表recurrent item 经常性项目reducing balance depreciation method 余额递减折旧法replacement 重置retired bill 已赎回票据return on capital employed 长期资本报酬率returns inwards book 销货退回日记簿returns outwards book 购货退回日记帐Sshare capital 股本share certificate 股票share 股份shareholders'equity 股东权益shareholders'fund 股东资金specific provision 专项损失准备金spot transactions 即期交易statement 报表stock account 存货帐stock records 存货记录簿stock turnover rate 存货周转率straight-line depreciation method 直线折旧法subsidiary account 明细分类帐surplus 盈余suspense account 暂记帐户syndicated loans 辛迪加贷款Tthe chart of account of a bank 银行会计科目表the dual currency accounting system 单一币种记帐法the multiple currency accounting system 原币记帐法trade-in 以旧换新trading and profit and loss account 损益表transfer 转让treasury 国库券trial balance 试算平衡表trustee 信讬人Vvendor account 出让人帐vostro accounts 来账科目Wworking capital ratio 营运资金比率working paper 工作底稿work-in-progress 在制品Yyear-end stock taking 年终盘点存货Board of Directors 董事会President 行长Executive Office 经理办公室Personnel Dept. 人事部General Affairs Dept. 总务部Co-ordination & Planning Dept. 综合计划部International Dept. 国际业务部Overseas Branches Dept. 海外部Foreign Exchange Dept. 外汇资金部First Credit Dept. 信贷一部Second Credit Dept. 信贷二部Accounting Dept. 财会部International Clearing Dept 国际清算部Banking Dept. 营业部Credit Card Dept. 信用卡部General Auditing Dept. 总稽核室Computer Center 电脑部Training Management Dept. 教育部Institute of International Finance 国际金融研究所Trust and Consultation Co. 信托咨询公司。

Default:违约failture to perform on a foerign exchange transaction or failture to pay an interest obligation on a debt. Fiscal:财政Fiscal is used to describe something that relates to government money or public money, especially taxes.The accountants audited the company’s books at the end of the fiscal year.财政年度结束时，会计师们审查公司的账册。

Reserves:储备The dollar’s reserve-currency status let America borrow cheaply, causing the country’s credit and housing bubbles to persist for longer than they otherwise would have.美元作为储备货币的地位让美国可以很便宜地借到钱，这导致了美国的信贷和房屋泡沫比本来持续了更长的时间。

Circulate:流通During a depression money circulates slowly.循环在商业萧条时期，货币流通滞缓。

Domestic:国内的Low prices crimped domestic output and foreign imports.低物价阻碍了国内出口和国外进口。

Gold:黄金America went off the gold standard after the Great Depression.大萧条后，美国停止使用金本位制。

Minimum:最小值Employers frequently pay workers below the minimum wage, and some employers do not pay their workers at all.雇主常付给工人低于最低工资的薪水，而且有些雇主根本给他们的工人支薪。

Chapter 3International Financial Markets Lecture OutlineMotives for Using International Financial Markets Motives for Investing in Foreign MarketsMotives for Providing Credit in Foreign MarketsMotives for Borrowing in Foreign MarketsForeign Exchange MarketHistory of Foreign ExchangeForeign Exchange TransactionsExchange QuotationsForeignInterpretingCurrency Futures and Options MarketsInternational Money MarketOrigins and DevelopmentStandardizing Global Bank RegulationsInternational Credit MarketSyndicated LoansInternational Bond MarketEurobond MarketDevelopment of Other Bond MarketsComparing Interest Rates Among CurrenciesInternational Stock MarketsIssuance of Foreign Stock in the U.S.Issuance of Stock in Foreign MarketsComparison of International Financial MarketsHow Financial Markets Affect an MNC’s ValueChapter ThemeThis chapter identifies and discusses the various international financial markets used by MNCs. These markets facilitate day-to-day operations of MNCs, including foreign exchange transactions, investing in foreign markets, and borrowing in foreign markets.Topics to Stimulate Class Discussion1. Why do international financial markets exist?2. How do banks serve international financial markets?3. Which international financial markets are most important to a firm that consistently needsshort-term funds? What about a firm that needs long-term funds?Critical debateShould firms that go public engage in international offerings?Proposition Yes. When a firm issues shares to the public for the first time in an initial public offering (IPO), it is naturally concerned about whether it can place all of its shares at a reasonable price. It will be able to issue its shares at a higher price by attracting more investors. It will increase its demand by spreading the shares across countries. The higher the price at which it can issue shares, the lower is its cost of using equity capital. It can also establish a global name by spreading shares across countries.Opposing view No. If a firm spreads its shares across different countries at the time of the IPO, there will be less publicly traded shares in the home country. Thus, it will not have as much liquidity in the secondary market. Investors desire shares that they can easily sell in the secondary market, which means that they require that the shares have liquidity. To the extent that a firm reduces its liquidity in the home country by spreading its share across countries, it may not attract sufficient home demand for the shares. Thus, its efforts to create global name recognition may reduce its name recognition in the home country.With whom do you agree? State your reasons. Use InfoTrac or some other search engine to learn more about this issue. Which argument do you support? Offer your own opinion on this issue.ANSWER: The key is that students recognize the tradeoff involved. A firm that engages in a relatively small IPO will have limited liquidity even when all of the stock is issued in the home country. Thus, it should not consider issuing stock internationally. However, firms with larger stock offerings may be in a position to issue a portion of their shares outside the home country. They should not spread the stocks across several countries, but perhaps should target one or two countries where they conduct substantial business. They want to ensure sufficient liquidity in each of the foreign countries where they sell shares.Stock Markets are inefficientPropositionI cannot believe that if the value of the euro in terms of, say, the British pound increases three days in a row, on the fourth day there is still a 50:50 chance that it will go up or down in value. I think that most investors will see a trend and will buy, therefore the price is morelikely to go up. Also, if the forward market predicts a rise in value, on average, surely it is going to rise in value. In other words, currency prices are predictable. And finally, if it were so unpredictable and therefore unprofitable to the speculator, how is it that there is such a vast sum of money being traded every day for speculative purposes – there is no smoke without fire.The simple answer is that if that is what you believe, buy currencies that have viewOpposingincreased three days in a row and on average you should make a profit, buy currencies where the forward market shows an increase in value. The fact is that there are a lot of investors with just your sort of views. The market traders know all about such beliefs and will price the currency so that such easy profit (their loss) cannot be made. Look at past currency rates for yourself, check all fourth day changes after three days of rises, any difference is going to be not enough to cover transaction costs or trading expenses and the slight inaccuracy in your figures which are likely to be closing day mid point of the bid/ask spread. No, all currency movements are related to information and no-one knows if tomorrows news will be better or worse than expected.With whom do you agree? Could there be undiscovered patterns? Could some movements not be related to information? Could some private news be leaking out?ANSWER: Clearly there are no obvious patterns. Discussion on the impossibility of obvious patterns is worth emphasizing. However, does market inefficiency necessarily involve patterns, could market manipulation be occasional. There is worrying evidence from share price movements that there is unusual movement before announcements on many occasions, so the ideathat traders do not occasionally collude and move the price without supporting economic evidence is not an unreasonable view. Proof is however difficult as we have to separate anticipation from prior knowledge, the lucky speculator from the speculator who was in the know.Answers to End of Chapter Questions1. Motives for Investing in Foreign Money Markets. Explain why an MNC may invest fundsin a financial market outside its own country.ANSWER: The MNC may be able to earn a higher interest rate on funds invested in a financial market outside of its own country. In addition, the exchange rate of the currency involved may be expected to appreciate.2. Motives for Providing Credit in Foreign Markets. Explain why some financial institutionsprefer to provide credit in financial markets outside their own country.ANSWER: Financial institutions may believe that they can earn a higher return by providing credit in foreign financial markets if interest rate levels are higher and if the economic conditions are strong so that the risk of default on credit provided is low. The institutions may also want to diversity their credit so that they are not too exposed to the economic conditions in any single country.3. Exchange Rate Effects on Investing. Explain how the appreciation of the Australian dollaragainst the euro would affect the return to a French firm that invested in an Australian money market security.ANSWER: If the Australian dollar appreciates over the investment period, this implies that the French firm purchased the Australian dollars to make its investment at a lower exchange rate than the rate at which it will convert A$ to euros when the investment period is over.Thus, it benefits from the appreciation. Its return will be higher as a result of this appreciation.4. Exchange Rate Effects on Borrowing. Explain how the appreciation of the Japanese yenagainst the UK pound would affect the return to a UK firm that borrowed Japanese yen and used the proceeds for a UK project.ANSWER: If the Japanese yen appreciates over the borrowing period, this implies that the UK firm converted yen to pounds at a lower exchange rate than the rate at which it paid for yen at the time it would repay the loan. Thus, it is adversely affected by the appreciation. Its cost of borrowing will be higher as a result of this appreciation.5. Bank Services. List some of the important characteristics of bank foreign exchange servicesthat MNCs should consider.ANSWER: The important characteristics are (1) competitiveness of the quote, (2) the firm’s relationship with the bank, (3) speed of execution, (4) advice about current market conditions, and (5) forecasting advice.6. Bid/ask Spread. Delay Bank’s bid price for US dollars is £0.53 and its ask price is £0.55.What is the bid/ask percentage spread?ANSWER: (£0.55– £0.53)/£0.55 = .036 or 3.6%7. Bid/ask Spread. Compute the bid/ask percentage spread for Mexican peso in which the askrate is 20.6 New peso to the dollar and the bid rate is 21.5 New peso to the dollar.ANSWER: direct rates are 1/20.6 = $0.485:1 peso as the ask rate and 1/21.5 = $0.465:1 peso as the bid rate so the spread is[($0.485 – $0.465)/$0.485] = .041, or 4.1%. Note that the spread is fro the Mexiccan peso not the dollar.8. Forward Contract. The Wolfpack ltd is a UK exporter that invoices its exports to the UnitedStates in dollars. If it expects that the dollar will appreciate against the pound in the future, should it hedge its exports with a forward contract? Explain..ANSWER: The forward contract can hedge future receivables or payables in foreign currencies to insulate the firm against exchange rate risk. Yet, in this case, the Wolfpack Corporation should not hedge because it would benefit from appreciation of the dollar when it converts the dollars to pounds.9. Euro. Explain the foreign exchange situation for countries that use the euro when theyengage in international trade among themselves.ANSWER: There is no foreign exchange. Euros are used as the medium of exchange.10. Indirect Exchange Rate. If the direct exchange rate of the euro is worth £0.685, what is theindirect rate of the euro? That is, what is the value of a pound in euros?ANSWER: 1/0.685 = 1.46 euros.11. Cross Exchange Rate. Assume Poland’s currency (the zloty) is worth £0.17 and theJapanese yen is worth £0.005. What is the cross (implied) rate of the zloty with respect to yen?ANSWER: £0.17/£0.005 = 34 zloty:1 yen12. Syndicated Loans. Explain how syndicated loans are used in international markets.ANSWER: A large MNC may want to obtain a large loan that no single bank wants to accommodate by itself. Thus, a bank may create a syndicate whereby several other banks also participate in the loan.13. Loan Rates. Explain the process used by banks in the Eurocredit market to determine the rateto charge on loans.ANSWER: Banks set the loan rate based on the prevailing LIBOR, and allow the loan rate to float (change every 6 months) in accordance with changes in LIBOR.14. International Markets. What is the function of the international money market? Brieflydescribe the reasons for the development and growth of the European money market. Explain how the international money, credit, and bond markets differ from one another.ANSWER: The function of the international money market is to efficiently facilitate the flow of international funds from firms or governments with excess funds to those in need of funds.Growth of the European money market was largely due to (1) regulations in the U.S. that limited foreign lending by U.S. banks; and (2) regulated ceilings placed on interest rates of dollar deposits in the U.S. that encouraged deposits to be placed in the Eurocurrency market where ceilings were nonexistent.The international money market focuses on short-term deposits and loans, while the international credit market is used to tap medium-term loans, and the international bond market is used to obtain long-term funds (by issuing long-term bonds).15. Evolution of Floating Rates. Briefly describe the historical developments that led to floatingexchange rates as of 1973.ANSWER: Country governments had difficulty in maintaining fixed exchange rates. In 1971, the bands were widened. Yet, the difficulty of controlling exchange rates even within these wider bands continued. As of 1973, the bands were eliminated so that rates could respond to market forces without limits (although governments still did intervene periodically).16. International Diversification. Explain how the Asian crisis would have affected the returnsto a UK. firm investing in the Asian stock markets as a means of international diversification.[See the chapter appendix.]ANSWER: The returns to the UK firm would have been reduced substantially as a result of the Asian crisis because of both declines in the Asian stock markets and because of currency depreciation. For example, the Indonesian stock market declined by about 27% from June 1997 to June 1998. Furthermore, the Indonesian rupiah declined against the U.S. dollar by 84%.17.Eurocredit Loans.a.With regard to Eurocredit loans, who are the borrowers?b. Why would a bank desire to participate in syndicated Eurocredit loans?c. What is LIBOR and how is it used in the Eurocredit market?ANSWER:a. Large corporations and some government agencies commonly request Eurocredit loans.b. With a Eurocredit loan, no single bank would be totally exposed to the risk that theborrower may fail to repay the loan. The risk is spread among all lending banks within the syndicate.c. LIBOR (London interbank offer rate) is the rate of interest at which banks in Europe lendto each other. It is used as a base from which loan rates on other loans are determined in the Eurocredit market.18. Foreign Exchange. You just came back from Canada, where the Canadian dollar was worth£0.43. You still have C$200 from your trip and could exchange them for pounds at the airport, but the airport foreign exchange desk will only buy them for £0.40. Next week, you will be going to Mexico and will need pesos. The airport foreign exchange desk will sell you pesos for £0.055 per peso. You met a tourist at the airport who is from Mexico and is on his way to Canada. He is willing to buy your C$200 for 1500 New Pesos. Should you accept the offer or cash the Canadian dollars in at the airport? Explain.ANSWER: Exchange with the tourist. If you exchange the C$ for pesos at the foreign exchange desk, the C$200 is multiplied by £0.40 and then divided by £0.055 ie a ratio of £0.40/0.055 = 7.27 pesos to the C$. The total pesos would be 200 x 7.27 = 1454 pesos, a little less than is being offered by the tourist.19. Foreign Stock Markets. Explain why firms may issue stock in foreign markets. Why mightMNCs issue more stock in Europe since the conversion to a single currency in 1999?ANSWER: Firms may issue stock in foreign markets when they are concerned that their home market may be unable to absorb the entire issue. In addition, these firms may have foreign currency inflows in the foreign country that can be used to pay dividends on foreign-issued stock. They may also desire to enhance their global image. Since the euro can be used in several countries, firms may need a large amount of euros if they are expanding across Europe.20. Stock Market Integration. Bullet plc a UK firm, is planning to issue new shares on theLondon Stock Exchange this month. The only decision still to be made is the specific day on which the shares will be issued. Why do you think Bullet monitors results of the Tokyo stock market every morning?ANSWER: The UK stock market prices sometimes follow Japanese market prices. Thus, the firm would possibly be able to issue its stock at a higher price in the UK if it can use the Japanese market as an indicator of what will happen in the UK market. However, this indicator will not always be accurate.Advanced Questions21. Effects of September 11. Why do you think the terrorist attack on the U.S. was expected tocause a decline in U.S. interest rates? Given the expectations for a potential decline in U.S.interest rates and stock prices, how were capital flows between the U.S. and other countries likely affected?ANSWER: The attack was expected to cause a weaker economy, which would result in lower U.S. interest rates. Given the lower interest rates, and the weak stock prices, the amount of funds invested by foreign investors in U.S. securities would be reduced.22. International Financial Markets. Carrefour the French Supermarket chain has established retail outlets worldwide. These outlets are massive and contain products purchased locally as well as imports. As Carrefour generates earnings beyond what it needs abroad, it may remit those earnings back to France. Carrefour is likely to build additional outlets especially in China.a. Explain how the Carrefour outlets in China would use the spot market in foreign exchange.ANSWER:The Carrefour stores in China need other currencies to buy products from other countries, and must convert the Chinese currency (yuan) into the other currencies in the spot market to purchase these products. They also could use the spot market to convert excess earnings denominated in yuan into euros, which would be remitted to the French parent.b. Explain how Carrefour might utilize the international money markets when it isestablishing other Carrefour stores in Asia.ANSWER: Carrefour may need to maintain some deposits in the Eurocurrency market that can be used (when needed) to support the growth of Carrefour stores in various foreign markets. When some Carrefour stores in foreign markets need funds, they borrow from banks in the Eurocurrency market. Thus, the Eurocurrency market serves as a deposit or lending source for Carrefour and other MNCs on a short-term basis. (Eurocurrency refers to international currencies, most likely the dollar, not just the euro!)c. Explain how Carrefour could use the international bond market to finance theestablishment of new outlets in foreign markets.ANSWER: Carrefour could issue bonds in the Eurobond market to generate funds needed to establish new outlets. The bonds may be denominated in the currency that is needed; then, once the stores are established, some of the cash flows generated by those stores could be used to pay interest on the bonds.23.Interest Rates. Why do interest rates vary among countries? Why are interest rates normallysimilar for those European countries that use the euro as their currency? Offer a reason why the government interest rate of one country could be slightly higher than that of the government interest rate of another country, even though the euro is the currency used in both countries.ANSWER: Interest rates in each country are based on the supply of funds and demand for funds for a given currency. However, the supply and demand conditions for the euro are dictated by all participating countries in aggregate, and do not vary among participating countries. Yet, the government interest rate in one country that uses the euro could be slightly higher than others that use the euro if it is subject to default risk. The higher interest rate would reflect a risk premium.Blades plc Case Study。

一、名词解释国际收支(Balance of Payments)有狭义和广义两个层面的含义。

狭义的国际收支的概念是建立在现金基础（cash Basic）上的，仅包含已实现外汇收支的交易，因此称为狭义的国际收支概念）。

广义的国际收支概念是指一国或地区居民与非居民在一定时期内全部经济交易的货币价值之和，它是以交易为基础。

只有建立在全部经济交易基础之上的广义的国际收支概念才能较好地完整反映当今一国对外经济总量状况。

马歇尔－勒纳条件(Marshall-Lerner Condition)研究的是:在什么样的情况下，贬值才能导致贸易收支的改善。

马歇尔一勒纳条件认为，即在不考虑供给弹性的情况下，当一国的出口需求弹性＋进口需求弹性>1时，本币贬值才会改善本国的贸易收支。

特别提款权是IMF为了解决成员国国际清偿力不足问题而于1969年9月在IMF第24届年会上创设的一种新的国际储备资产，其实质是用以补充会员国国际储备资产的一个额外资金来源。

Factoring(保付代理)简称保理，是指出口商以延期付款的形式出售商品，在货物装运后立即将发票、汇票、提单等有关单据，卖断给保理机构，收进全部或一部分货款，从而取得资金融通。

第三代货币危机模型：美国经济学家克鲁格曼(Krugman) 1998年提出了第三代货币危机模型—“道德风险”货币危机模型。

其主要内容是：在金融危机中，道德风险表现为政府对存款者所作的担保使金融机构进行风险很高的投资行为，从而造成巨额的呆坏帐，引起公众的信心危机和金融机构的偿付力危机，最终导致金融危机。

在信息不对称的情况下，资本借款市场上可能存在着道德风险。

但是，如果政府向金融市场中借贷交易一方或双方免费提供了还款保险，那么在信息对称的情况下道德风险也可以存在，因为免费保险的存在减轻了投资者风险承担的水平，由此诱发投资者投资于大于社会最优水平的风险项目。

道德风险会引起银行和外汇市场的双重危机。

《全球金融服务贸易协议》1997年12月13日，70个国家签署了以56份金融开放承诺为基础的《全球金融服务贸易协议》。

银团贷款银团贷款的定义银团贷款又称为辛迪加贷款（Syndicated Loan），是由获准经营贷款业务的一家或数家银行牵头，多家银行与非银行金融机构参加而组成的银行集团（Banking Group）采用同一贷款协议，按商定的期限和条件向同一借款人提供融资的贷款方式。

国际银团是由不同国家的多家银行组成的银行集团。

对于贷款银行来说，辛迪加贷款的优点是分散贷款风险，减少同业之间的竞争；对于借款人来说，其优点是可以筹到独家银行所无法提供的数额大、期限长的资金。

即一般来说，银团贷款金额大、期限长，贷款条件较优惠，既能保障项目资金的及时到位又能降低建设单位的融资成本，是重大基础设施或大型工业项目建设融资的主要方式。

产品服务对象为有巨额资金需求的大中型企业、企业集团和国家重点建设项目。

[编辑]银团贷款的细分种类银团贷款的方式有两种：1、直接银团贷款由银团各成员行委托代理行向借款人发放、收回和统一管理贷款。

国际银团贷款以直接银团贷款方式为主。

2、间接银团贷款由牵头行直接向借款人发放贷款，然后再由牵头行将参加贷款权(即贷款份额)，分别转售给其他银行，全部的贷款管理及放款、收款由牵头行负责。

[编辑]银团贷款的币种和期限1、币种银团贷款开办的币种分为人民币银团贷款和外币银团贷款。

2、期限银团贷款期限比较灵活，短则3—5年，长则可达10—20年，通常为7—10年。

在银团贷款的整个贷款期限内又可分为3个阶段，即提款期 (Available Period)、宽限期(Grace Period)和还款期(Repayment Period)，借款人可合理确定自己的贷款期限。

[编辑]银团贷款的价格贷款价格由利息和费用两部分组成。

１、利率：主要分为固定利率和浮动利率两种：２、费用在国际银团贷款中，借款人除了支付贷款利息以外，还要承担一些费用，如承诺费、管理费、代理费、安排费及杂费等等。

(１)承诺费(Commitment Fee)也称为承担费。

Blaise Gadanecz+41 61 280 8417blaise.gadanecz@ The syndicated loan market: structure, development and implications1The syndicated loan market allows a more efficient geographical and institutional sharing of risk. Large US and European banks originate loans for emerging market borrowers and allocate them to local banks. Euro area banks have expanded pan-European lending and have found funding outside the euro area.JEL classification: G100, G200.Syndicated loans are credits granted by a group of banks to a borrower. They are hybrid instruments combining features of relationship lending and publicly traded debt. They allow the sharing of credit risk between various financial institutions without the disclosure and marketing burden that bond issuers face. Syndicated credits are a very significant source of international financing, with signings of international syndicated loan facilities accounting for no less than a third of all international financing, including bond, commercial paper and equity issues (Graph 1).This special feature presents a historical review of the development of this increasingly global market and describes its functioning, focusing on participants, pricing mechanisms, primary origination and secondary trading. It also gauges its degree of geographical integration. We find that large US and European banks tend to originate loans for emerging market borrowers and allocate them to local banks. Euro area banks seem to have expanded pan-European lending and have found funding outside the euro area.Development of the marketThe evolution of syndicated lending can be divided into three phases. Credit syndications first developed in the 1970s as a sovereign business. On the eve of the sovereign default by Mexico in 1982, most of developing countries’ debt consisted of syndicated loans. The payment difficulties experienced by many emerging market borrowers in the 1980s resulted in the restructuring of1The views expressed in this article are those of the author and do not necessarily reflect those of the BIS. I would like to thank Claudio Borio, Már Gudmundsson, Eli Remolona and Kostas Tsatsaronis for their comments, Denis Pêtre for help with database programming, and Angelika Donaubauer for excellent research assistance.Mexican debt into Brady bonds in 1989. That conversion process catalysed a shift in patterns for emerging market borrowers towards bond financing, resulting in a contraction in syndicated lending business. Since the early 1990s, however, the market for syndicated credits has experienced a revival and has progressively become the biggest corporate finance market in the United States. It was also the largest source of underwriting revenue for lenders in the late 1990s (Madan et al (1999)).The first phase of expansion began in the 1970s. Between 1971 and 1982, medium-term syndicated loans were widely used to channel foreign capital to the developing countries of Africa, Asia and especially Latin America. Syndication allowed smaller financial institutions to acquire emerging market exposure without having to establish a local presence. Syndicated lending to emerging market borrowers grew from small amounts in the early 1970s to $46 billion in 1982, steadily displacing bilateral lending.Lending came to an abrupt halt in August 1982, after Mexico suspended interest payments on its sovereign debt, soon followed by other countries including Brazil, Argentina, Venezuela and the Philippines. Lending volumes reached their lowest point at $9 billion in 1985. In 1987, Citibank wrote down asecurities whose interest payments and principal benefited from varying degrees of collateralisation on US Treasuries.The Brady plan provided a new impetus to the syndicated loan market. By the beginning of the 1990s, banks, which had suffered severe losses in the debt crisis, started applying more sophisticated risk pricing to syndicated lending (relying in part on techniques initially developed in the corporate bondmarket). They also started to make wider use of covenants, triggers which linked pricing explicitly to corporate events such as changes in ratings and debt servicing. While banks became more sophisticated, more data became available on the performance of loans, contributing to the development of a secondary market which gradually attracted non-bank financial firms, such as pension funds and insurance firms. Eventually, guarantees and unfunded2 risk transfer techniques such as synthetic securitisation enabled banks to buy protection against credit risk while keeping the loans on the balance sheet. Theborrowers from emerging markets, corporations in industrialised countries developed an appetite for syndicated loans. They saw them as a useful, flexible source of funds that could be arranged quickly and relied upon to complement other sources of external financing such as equities or bonds.As a result of these developments, syndicated lending has grown strongly from the beginning of the 1990s to date. Signings of new loans – including domestic facilities – totalled $1.6 trillion in 2003, more than three times thebecause of the traditional importance of “main banks” for corporations.2In an unfunded risk transfer, such as a credit default swap, the risk-taker does not provide upfront funding in the transaction but is faced with obligations depending on the evolution of the borrower’s creditworthiness.Syndicated credits have thus become a very significant source of financing. The international market3accounts for about a third of all international financing, including bond, commercial paper and equity issues. The proportion of merger-, acquisition- and buyout-related loans represented 13% of the total volume in 2003, against 7% in 1993. Following a spate of privatisations in emerging markets, banks, utilities, and transportation and mining companies4 have started to displace sovereigns as the major borrowers from these regions (Robinson (1996)).5A hybrid between relationship lending and disintermediated debtIn a syndicated loan, two or more banks agree jointly to make a loan to a borrower. Every syndicate member has a separate claim on the debtor, although there is a single loan agreement contract. The creditors can be divided into two groups. The first group consists of senior syndicate members and is led by one or several lenders, typically acting as mandated arrangers, arrangers, lead managers or agents.6These senior banks are appointed by the borrower to bring together the syndicate of banks prepared to lend money at the terms specified by the loan. The syndicate is formed around the arrangers – often the borrower’s relationship banks – who retain a portion of the loan and look for junior participants. The junior banks, typically bearing manager or participant titles, form the second group of creditors. Their number and identity may vary according to the size, complexity and pricing of the loan as well as the willingness of the borrower to increase the range of its banking relationships.structure to grant a loan to Starwood Hotels & Resorts Worldwide, Inc in 2001.Senior banks may have several reasons for arranging a syndication. It can be a means of avoiding excessive single-name exposure, in compliance with regulatory limits on risk concentration, while maintaining a relationship with the borrower. Or it can be a means to earn fees, which helps diversify their income. In essence, arranging a syndicated loan allows them to meet borrowers’ demand for loan commitments without having to bear the market and credit risk alone.3An international syndicated loan is defined in the statistics compiled by the BIS as a facility for which there is at least one lender present in the syndicate whose nationality is different from that of the borrower.4Syndicated loans are widely used to fund projects in these sectors, in industrial and emerging market countries alike. A feature article on page 91 of this BIS Quarterly Review explores the nature of credit risk in project finance.5Interestingly, for most of the 1990s, emerging market borrowers were granted longer-maturity loans, five years on average, than industrialised country ones (three–four years).6These bank roles, enumerated here in decreasing order of seniority, involve an active role in determining the syndicate composition, negotiating the pricing and administering the facility.For junior banks, participating in a syndicated loan may be advantageoussectors, or indeed a desire to cut down on origination costs. While junior participating banks typically earn just a margin and no fees, they may alsohope that in return for their involvement, the client will reward them later withmore profitable business, such as treasury management, corporate finance oradvisory work (Allen (1990)).7Pricing structure: spreads and feesAs well as earning a spread over a floating rate benchmark (typically Libor) onthe portion of the loan that is drawn, banks in the syndicate receive variousfees (Allen (1990), Table 1). The arranger 8putting the deal together. This is often called a praecipium or arrangement fee The underwriters similarly earn an underwriting fee7 In practice, though, these rewards fail to materialise in a systematic manner. Indeed,anecdotal evidence for the United States suggests that, for this reason, smaller players havewithdrawn from the market lately and have stopped extending syndicated loans as a loss-leader.8 For this discussion, it has to be recalled that the same bank can act in various capacities in asyndicate. For instance, the arranger bank can also act as an underwriter and/or allocate asmall portion of the loan to itself and therefore also be a junior participant.Structure of fees in a syndicated loanFee Type RemarksArrangement fee Front-end Also called praecipium. Received and retained by thelead arrangers in return for putting the deal togetherLegal fee Front-end Remuneration of the legal adviserUnderwriting fee Front-end Price of the commitment to obtain financing during thefirst level of syndicationParticipation fee Front-end Received by the senior participantsFacility fee Per annum Payable to banks in return for providing the facility,whether it is used or notCommitment fee Per annum, charged on undrawn part Paid as long as the facility is not used, to compensatethe lender for tying up the capital corresponding to thecommitmentUtilisation fee Per annum, charged on drawn part Boosts the lender’s yield; enables the borrower toannounce a lower spread to the market than what isactually being paid, as the utilisation fee does notalways need to be publicisedAgency fee Per annum Remuneration of the agent bank’s servicesConduit fee Front-end Remuneration of the conduit bank 1Prepayment fee One-off if prepaymentPenalty for prepayment1 The institution through which payments are channelled with a view to avoiding payment ofwithholding tax. One important consideration for borrowers consenting to their loans being traded onthe secondary market is avoiding withholding tax in the country where the acquirer of the loan isdomiciled.Source: Compiled by author. Table 1participation feefor agreeing tothe commitment. The most junior syndicate members typically only earn the spread over the reference yield. Once the credit is established and as long as it is not drawn, the syndicate members often receive an annual commitment or facility fee proportional to their commitment (largely to compensate for the cost of regulatory capital that needs to be set aside against the commitment). As soon as the facility is drawn, the borrower may have to pay a per annum utilisation fee on the drawn portion.The agent bank typically earns an agency fee,usually payable annually, to cover the costs of administering the loan.prepayment fee or otherwise compensate the lenders in the event thatmargin.At an aggregate level, the relative size of spreads and fees differs systematically in conjunction with a number of factors. Fees are more significant for Euribor-based than for Libor-based loans. Moreover, for industrialised market borrowers, the share of fees in the total loan cost is higher than for emerging market ones. Arguably this could be related to the sectoral composition of borrowers in these segments. Non-sovereign entities, more prevalent in industrialised countries, may have a keener interest, for tax or market disclosure reasons, in incurring a larger part of the total loan cost in the form of fees rather than spreads. However, the total cost (spreads, front-end and annual fees)9 of loans granted to emerging market borrowers is higherthan that of facilities extended to industrialised countries (Graphs 3 and 4).There is also more variance in commitment fees on emerging market facilities.In sum, lenders seem to demand additional compensation for the higher andmore variable credit risk in emerging markets, in the form of both spreads andfees.Spreads and fees are not the only compensation that lenders can demandin return for assuming risk. Guarantees, collateral and loan covenants offer thepossibility of explicitly linking pricing to corporate events (rating changes, debtservicing). Collateralisation and guarantees are more often used for emergingmarket borrowers (Table 2), while covenants are much more widely used for9 One should note that the fees shown in Graphs 3 and 4 are not directly comparable. InGraph 3, for the purposes of comparability with spreads, annual and front-end fees are addedtogether by annualising the latter over the whole maturity of the facility, assuming full andimmediate drawdown. Graph 4, on the other hand, shows annual and front-end feesseparately without annualising the latter. Non-price components in the remuneration of riskShare of syndicated loans with covenants, collateral and guarantees, in per cent, by nationality of borrowerCovenants Collateral GuaranteesEmerging Industrialised Emerging Industrialised Emerging Industrialised 1993–960 16 40 15 31 7 1997–20002 24 49 16 22 4 2001–0413 19 37 13 214 1 First quarter only for 2004.Source: Dealogic Loanware. Table 2borrowers in industrialised countries (possibly because such terms are easier to enforce there). Primary and secondary markets: sharing versus transferring risk While commercial banks dominate the primary market, both at the senior arranger and at the junior funds provider levels, other institutions have made inroads over time. Globally, there are virtually no non-commercial banks or10 to arrange loan syndications. Besides the greater involvement of investment banks, there is also growing participation by multilateral agencies such as the International Finance Corporation or the Inter-American Development Bank.11 Syndicated credits are increasingly traded on secondary markets. The another creditor.12 The US market has generated the highest share of transferable loans (25% of total loans between 1993 and 2003), followed by the European marketplace (10%). The secondary market is commonly perceived to consist of three segments: par/near par, leveraged (or high-yield) and distressed. Most of the liquidity can be found in the distressed segment. Loans Participants in the secondary market can be divided into three categories: Institutions actively engaged in primary loan origination have an advantage in called “vulture funds” (institutional investors actively focused on distressed10 For instance, it is very common nowadays for a medium-term loan provided by a syndicate tobe refinanced by a bond at, or before, the loan’s stated maturity. Similarly, US commercialpaper programmes are frequently backed by a syndicated letter of credit.11 This provides an opportunity for risk-sharing between public and private sector investors. Itusually takes the form of syndicated loans granted by multilateral agencies with tranchesreserved for private sector bank lenders.12 Transferability is determined by consent of the borrower as stated in the original loanagreement. Some borrowers do not allow loans to be traded on the secondary market as theywant to preserve their banking relationships.debt). Non-financial corporations and other institutional investors such asinsurance companies also trade, but to a lesser extent. As a growing number offinancial institutions establish loan portfolio management departments, thereappears to be increasing attention paid to relative value trades. Discrepanciesin yield/return between loans and other instruments such as credit derivatives,and liquidity.13 US banks, whose outstanding syndicated loan commitmentsare regularly monitored by the Federal Reserve Board, appear to have beenrelatively successful in transferring some of their syndicated credits, includingup to one quarter of their problem loans, to non-bank investors (Table 3).Buyers of loans on the secondary market can acquire exposure to sectors orcountries, especially when they do not have the critical size to do so on theprimary market.14While growing, secondary trading volumes remain relatively modestcompared to the total volume of syndicated credits arranged on the primary50% compared to the previous year (Graph 5).Distressed loans continued to represent a sizeable fraction of totalsecondary trading in the United States, and gained in importance in Europe.13 The seller banks often enhance their fee income by arranging new loans to roll over facilitiesthey had previously granted to borrowers. They may sell old facilities on the secondary marketto manage capacity on their balance sheet, which is required to hold some of the new loans.14For example, minimum participation amounts on the primary market may exceed the bank’scredit limits. US syndicated credits 1Share of total credits 2 Percentage classified 3 US banks Foreign banking organisations Non-banks Memo:Total credits ($ bn) US banks Foreign banking organisationsNon-banks Total credits 2000 48 45 7 1,9512.8 2.6 10.23.2 2001 46 46 8 2,0505.1 4.7 14.6 5.7 2002 45 45 10 1,8716.47.3 23.08.4 200345 44 11 1,644 5.8 9.0 24.4 9.3 1 Includes both outstanding loans and undrawn commitments. 2 Dollar volume of credits held by each group of institutions as a percentage of the total dollar volume of credits. 3 Dollar volume of credits classified “substandard”, “doubtful” or “loss” by examiners as a percentage of the total dollar volume of credits.Source: Board of Governors of the Federal Reserve System. Table 3Admittedly, this to some extent reflects higher levels of corporate distress in Europe. But as the investment grade segment matures, it is also indicative of sustained investor appetite and of the market’s improved ability to absorb aIn the Asia-Pacific region, secondary volumes are still a tiny fraction ofAsian secondary market was exceptionally active. That year, large blocks of loan portfolios changed hands as Japanese banks restructured their distressed loan portfolios.15 Trading was more subdued in subsequent years,16 although banks’ interest appears to have recently been rekindled by the secondary prices of loans, which have decreased less than those of collateralised debt obligations and bonds.17Geographical integration of the marketAs financial markets are becoming more integrated geographically, a question is how this process manifests itself in syndicated lending in the form of cross-border deals. To answer this question, we examine the nationality composition of syndicates on the primary market, where information is readily available15Banks tend to trade blocks of loans when they restructure whole portfolios. In normal times, loan by loan trading is more common.16Nonetheless, Japanese banks have recently been very active in transferring loans on the Japanese secondary market. According to a quarterly survey conducted by the Bank of Japan, for the financial year April 2003–March 2004, such transfers totalled ¥11 trillion, 38% of which were non-performing loans. This was followed in the second quarter of 2004 by unusually weak secondary market activity by historical standards.17According to practitioners, major international banks with an Asian presence are among the main sellers of loans, while demand comes from Taiwanese and Chinese banks.BIS Quarterly Review, December 2004 85about individual participants. We first perform this exercise at a global level and then within the euro area, in order to assess any impact from the introduction of the single currency.Table 4 shows the degree of international integration of syndicated loan markets, measured by the share of loans arranged or provided by banks of the same country or region as the borrower. At the senior arranger level, the nationality composition is calculated based on the number of deals, and at a junior participant level based on the dollar amounts provided by individual financial institutions. A number of findings stand out.First, unsurprisingly, there appears to be relatively little penetration by foreign lenders in the market for loans to Japanese, euro area and US borrowers. The senior arranger and junior funds provider banks in loan facilitiesInternational integration of the market% of deals1 where the arranger is of the same nationality2 as the borrower (based on number of deals)% of funds1 provided by banks of the same nationality2 as the borrower (based on USD amounts)By borrower nationality1993–98 1999–20043 1993–98 1999–20043Main countries and regionsUnited States 74 70 61 62Euro area459 72 71 67 United Kingdom 58 43 35 42 Other western Europe 37 26 36 25 Japan 62 84 63 87 Other industrialised economies 67 65 61 57Asia-Pacific 29 37 34 51 Eastern Europe 9 12 10 13 Latin America/Caribbean 5 7 6 8 Middle East & Africa 15 20 22 28 Offshore 54 36 44 31Euro area countriesAustria 5 42 33 42 Belgium 17 22 31 16 Finland 26 13 16 9 France 48 50 45 46 Germany 43 46 57 44 Greece 7 29 8 24 Ireland 20 18 16 14 Italy 34 53 39 48 Luxembourg 10 8 30 7 Netherlands 24 29 28 25 Portugal 31 27 30 23 Spain 64 51 64 49Euro area5 39 42 43 381 Calculated also including purely domestic deals.2 From the same region, where regions are shown.3 For 2004, firstquarter only. 4Borrower from any euro area country, arranger/provider from any euro area country. 5 Borrower fromsame euro area country as arranger/provider, euro area average.Sources: Dealogic Loanware; author’s calculations. Table 486 BIS Quarterly Review, December 2004BIS Quarterly Review, December 2004 8718 Second, foreign banks appear more present (with shares often in excess of 60%) in syndicates set up for European borrowers from outside the euro area and, in particular, the United Kingdom. It is interesting to note that Japanese borrowers tend to pay higher fees on average than UK borrowers, whose market is characterised by more foreign bank penetration. This may suggest that the market is more contestable in the United Kingdom. Third, with the possible exception of Asia, syndicates put together for emerging market borrowers tend to be dominated by foreign lenders. lenders.19 Given that the presence of a reputable major foreign arranger has a “certification effect” for banks which are ranked lower in the syndicate, this makes cross-border investment in a junior funds provider capacity easier than the provision of screening and monitoring services as a senior arranger. Finally, the advent of the euro appears to have led to some integration in the pan-European syndicated loan market, especially at the arranger level. The first two columns of Table 4 show that within the euro area, the percentage of 20 Meanwhile, the overall share 21 At the same time, the additional credits arranged at a pan-European level seem to have been funded largely by banks from outside the euro area, since the share of euro area banks among junior funds providers has remained relatively stable (last two columns of Table 4). This could reflect a greater balance sheet capacity outside the euro area.18 For US borrowers, the statement about low foreign penetration should be balanced by therelatively high share – approximately 45% since 2000 – of total syndicated credits held by foreign banking organisations, after allowing for transfers on the secondary market (Table 3). 19 For more background and an extension of the analysis to bond markets, see McCauley et al(2002).20 While the euro is widely used as a currency of denomination for European (including easternEuropean) borrowers, the US dollar is still the currency of choice for syndicated lending worldwide (US dollar facilities represented 62% of total syndicated lending in 2003, while the euro accounted for 21%, and the pound sterling and the Japanese yen for 6% each).21 In a study of the bond underwriting market, Santos and Tsatsaronis (2003) show that theelimination of market segmentation associated with the single European currency failed to result in an intensification of the business links between borrowers and bond underwriters from the euro area. It must be stressed, though, that bond underwriting and syndicated loan markets are quite different, as bonds are sold to institutional investors and loans mainly to other banks.ConclusionThis special feature has presented a historical review of the development of the market for syndicated loans, and has shown how this type of lending, which started essentially as a sovereign business in the 1970s, evolved over the 1990s to become one of the main sources of funding for corporate borrowers.The syndicated loan market has advantages for junior and senior lenders. It provides an opportunity to senior banks to earn fees from their expertise in risk origination and manage their balance sheet exposures. It allows junior lenders to acquire new exposures without incurring screening costs in countries or sectors where they may not have the required expertise or established presence. Primary loan syndications and the associated secondary market therefore allow a more efficient geographical and institutional sharing of risk origination and risk-taking. For instance, loan syndications for emerging market borrowers tend to be originated by large US and European banks, which subsequently allocate the risk to local banks. Euro area banks have strengthened their pan-European loan origination activities since the advent of the single currency and have found funding for the resulting risk outside the euro area.However, we find that the geographical integration of the market appears to vary among regions, as reflected in varying degrees of international penetration. While these differences could also be related to disparities in the sizes of national markets, further research is needed to improve our understanding of market contestability by assessing whether they are systematically related to differences in loan pricing, especially fees.ReferencesAllen, T (1990): “Developments in the international syndicated loan market in the 1980s”, Quarterly Bulletin, Bank of England, February.Bank for International Settlements (2004): 74th Annual Report,Chapter 7, pp 133–4.Coffey, M (2000): “The US leveraged loan market: from relationship to return”, in T Rhodes (ed), Syndicated Lending, Practice and Documentation, Euromoney Books.Dennis, S and D Mullineaux (2000): “Syndicated loans”, Journal of Financial Intermediation, vol 9, October, pp 404–26.Madan, R, R Sobhani and K Horowitz (1999): “The biggest secret of Wall Street”, Paine Webber Equity Research.McCauley, R N, S Fung and B Gadanecz (2002): “Integrating the finances of East Asia”, BIS Quarterly Review, December.Pennacchi, G (2003): “Who needs a bank, anyway?”, Wall Street Journal, 17 December.Robinson, M (1996): “Syndicated lending: a stabilizing element in the Latin markets”, Corporate Finance Guide to Latin American Treasury & Finance.88 BIS Quarterly Review, December 2004。

以下是《#》为⼤家整理的关于《英⽂版借款合同范本》，供⼤家学习参考！Contract Number:BORROWER:Address:LENDER:Address:In accordance with provisions of Contract Law of the Peoples Republic of China and Bank of China, after reviewing the status and the request of the Borrower, the Lender agrees to grant the Borrower a line of credit on . The Borrower, Lender and Guarantor, through friendly negotiation, have executed this Contract as follows:ARTICLE 1 CURRENCY, AMOUNT AND TERM OF THE LOAN:1. The Currency under this loan is Reiminbi.2. The Line of the loan is yuan.3. The period of this loan is 12 months from the date of effectiveness of this contract.ARTICLE 2 THE PURPOSE OF THE LOAN:1. The purpose of this loan is used for working capital turnover.2. Without written approval of the Lender, the Borrower could not use the loan out of the scope of the purpose.ARTICLE 3 INTEREST RATE AND CALCULATION OF INTEREST:1. Interest rate: The interest rate shall be [***] During the loan term, if the countrys related authority adjusted the interest rate or the manner of calculation of interest, the interest of this contract shall be adjusted accordingly after one year from the date of execution of this contract.The adjustment shall be conducted when the interest rate are executed one year.It is not obliged to inform the Borrower when the adjustment of interest.2. The interest shall be calculated from the date of first drawdown and the actual days the borrower use. One year shall be calculated as 360 days.3. The payment of interests: The Borrower shall pay the interests per quarter. The payment date shall be , and If the payment for the last installment is not on the payment date,the interests shall deduct the interest from the bank account of the Borrower.In the event that the Borrower fails to pay the interests on time and the balance of the account of the Borrower is not enough for the payment of interest, the Lender shall have rights to collect a penalty being [***] of the outstanding amount per day for the Borrowers breach of contract.ARTICLE 4 OVERDUE INTERESTS AND MISUSING INTERESTS1. If the Borrower fails to repay the loan and can not reach a agreement with the Lender regarding the extension, the Lender shall collect an overdue penalty for [***] of the overdue amount per day.2. If the Borrower fails to uses the loan in accordance with the provisions set forth in this contract, the Lender shall have right to charge a interests for the misusing part at a rate of [***] per day.ARTICLE 5 ACCOUNTThe Borrower shall open Reiminbi basic account and/or foreign currency account at the Lender or Lenders branch for the use of draw-down, repayment,payment of interests and fees.ARTICLE 6 DRAW-DOWN1. The loan under this contract is revolving, the balance of this contract shall not more than the line of credit.2. The Borrower shall send a draw-down application as the form herein attached in this contract 7 days before the date of draw-down.3. The Borrower shall not draw the loan less than 1 million.ARTICLE 7 CONDITIONS FOR DRAW-DOWNThe following conditions shall be satisfied in advance of the draw-down date:1. The Borrower has opened foreign account and Reiminbi account at the office of the Lender or the branch of the Lender;2. This contract and the appendices have been effective;3. The Borrower has provided the recognition of the investment or certificate of the investment to the Lender;4. The Borrower has provided the board resolution and power of attorney regarding this loan contract;5. The Borrower has provided the list and the signature sample of the authorized person who empower to sign this contract and documents;6. The Guaranty under this contract has been effective;7. The Borrower has been satisfied the warrants under Article 11 of this contract;8. The other requirement for the draw-down have been satisfied.ARTICLE 8 REPAYMENT PLAN AND PREPAYMENT1. The Borrower shall repay the loan in accordance with the status of its cash. The Borrower shall inform the Lender the payment amount and date [***] prior to make the payment. The Borrower shall be obliged to repay the principal and related interests on due date without any condition.2. The payment made by the Borrower and the deduction from the account of the Borrower shall be used for repaying the interest at first and then for repaying the principal.3. In the event the Borrower fails to repay the loan, the Lender shall have rights to deduct the debt from the bank account of the Borrower at the Lender or empower the branches of the Lender to deduct the debt from the bank account of the Borrower at the Lenders branches;4. The installment of repayment shall not less than 1 million.ARTICLE 9 DEBT CERTIFICATEThe Lender shall keep record in the Lenders account for the principal,interests and fees and other fees of the Borrower under this contract; The above mentioned record and the documentation for the draw-down, repayment and payment of interest is the certificates of the debts between the Borrower and the Lender.ARTICLE 10 GUARANTY1. (the "Guarantor") shall be the guarantor for the loan under this contract and take jointly liabilities.2. During the term of this contract, if the guarantors financial status become deteriorated or the liabilities for repayment of debts become weak, the Lender shall have right to request the Borrower changes guarantor or provide mortgage and pawn secured for this loan under this contract.ARTICLE 11 REPRESENTATIONS AND WARRANTIESI. The Borrowers represents and warrants as follows:1. The Borrower is a company duly organized and validly existing under the law of the Peoples Republic of China and has the power and authority to own its property to consummate the transactions contemplated in this contract and join the litigation. The Borrower has the power to handle it assets used in operation.2. The Borrower is at its option to sign and perform this contract.It is the Borrowers true meaning and has the power to sign this contract and it is not breach it article of association or regulations or contracts. The procedure for signature and performance of this contract has been gone through and fully effectiveness.3. The all documents, materials, reports and certificates provided to the Lender by the borrower for consummation of this contract is true, real, compete and effective4. The Borrower shall not conceal the following events which is being happened or have been happened which will cause the Lender refuse to extend the loan:(1) The Borrower or the principal executives of the Borrower involve in material events which breach regulations, laws or compensation to others;(2) Pending actions and arbitration;(3) The Borrowers debts or proposed debts or liens and other encumbrances;(4) The other matters will impact the financial status or abilities of repayment for the debts;(5) The Borrower breached contract which is between the Borrower and other creditors.II. The Borrower hereby warrants as follows:1. Using the capital of the loan as usage set forth in this contract, the Borrower will not use the loan as Equity investment; The Borrower will not use the capital of the loan invest in security, future, real estate etc. The Borrower will not lend to the others privately or involving other maters which is prohibited by the country. The Borrower will not misusing or appropriation of the loan.2. Making payment and related expenses in accordance with the provisions set forth in this contract;3. Providing updated financial statement or financial bulletin every quarter; Providing the audited financial report at the first quart of each year; Providing operation report, financial report or other files and materials and shall warrant the reality, correct and effectiveness for the files and materials;4. Any anti-guaranty or other similar documents will not make any impact on the rights and benefits of the Lenders;5. Accepting the supervision of the Lender, provides assistance and cooperation for the Lenders supervisions;6. Will not reduce the registration capital; Prior approval from the lender shall be required when the Borrower changes of shareholders and operation manner(including but not limited to joint venture, cooperation, jointly cooperation; dissolution, closedown, liquidation, transformation; merger; change to share company, use the housing, machinery or other real assets or trademark, intellectual property, Knowhow, landing using rights or other intangible assets to invest in share company or investment company, trading of operation right or own right by contracting, joint operation, trusteeship)7. The Borrower shall inform the Lender and warrants the liability under its security will not more than net assets of the Borrower when the Borrower guarantee for other party or mortgage its assets. The Borrower warrants that will not dispose the assets which will make adverse impact on its ability of paying debts.8. The Borrower will not pay the other similar loans prior to the Lender;9. The Borrower warrants to inform the Lender immediately when the following events occurred:(1) The event of breach of contract under this contract or other loan or guaranty contracts between the Borrower and any branches of Bank of China or other banks, non-bank financial organization;(2) The Borrower changes shareholders or revise the article of association;(3) The Borrower suffer difficulties and bad result in financial and operation;(4) The Borrower involves in material actions or arbitration;10. The Borrower shall keep sufficient balance for repayment prior [***] to the due date.11. The Borrower shall keep its bank transactions regarding income collection, sell foreign currency or buy foreign currency ect. Shall be conducted at the Lender or other branches of the Lender. The turn-over for the capital shall satisfy the demand of the Lender;i d = " 1 2 6 " > I I I . T h e B o r r o w e r s r e p r e s e n t a t i o n s a n d w a r r a n t s h e r e u n d e r t h i s c o n t r a c t s h a l l b e e f f e c t i v e e v e n t h o u g h a n y m e n d m e n t , s u p p l e m e n t s o r r e v i s e d t o b e m a d e t o t h i s c o n t r a c t . / p > p b d s f i d = " 1 2 7 " > A R T I C L E 1 2 R E P R E S E N T A T I O N S A N D W A R R A N T S O F T H E L E N D E R b r b d s f i d = " 1 2 8 " > I . T h e L e n d e r r e p r e s e n t s a n d w a r r a n t s a s f o l l o w s : b r b d s f i d = " 1 2 9 " > 1 . T h e L e n d e r i s a s t a t e - o w n e d c o m m e r c i a l b a n k o r b r a n c h d u l y o r g a n i z e d a n d v a l i d l y e x i s t i n g u n d e r t h e l a w o f P . R . C a n d a p p r o v e d b y t h e I n d u s t r y a n d C o m m e r c i a l A d m i n i s t r a t i o n a n d h o l d s t h e f i n a n c i a l i n s t i t u t i o n s l e g a l p e r s o n l i c e n s e s a n d f i n a n c i a l i n s t i t u t i o n s o p e r a t i o n l i c e n s e t o b e q u a l i f i e d t o o p e r a t e f i n a n c i a l b u s i n e s s . b r b d s f i d = " 1 3 0 " > 2 . T h e L e n d e r h a s t a k e n a l l n e c e s s a r y a c t i o n t o a u t h o r i z e t h e e x e c u t i o n o f t h i s c o n t r a c t a n d p e r f o r m a n c e o f i t s o b l i g a t i o n s u n d e r t h i s c o n t r a c t . T h e L e n d e r i s d u l y a u t h o r i z e d t o e x t e n d t h i s l o a n . b r b d s f i d = " 1 3 1 " > I I . T h e L e n d e r w a r r a n t s a s f o l l o w s : b r b d s f i d = " 1 3 2 " > 1 . T h e L e n d e r s h a l l e x t e n d t h e l o a n i n a c c o r d a n c e w i t h t h e p r o v i s i o n s s e t f o r t h i n t h i s C o n t r a c t . b r b d s f i d = " 1 3 3 " > 2 . C o l l e c t i n t e r e s t s i n a c c o r d a n c e w i t h t h e r e g u l a t i o n s o f t h e P e o p l e s B a n k . / p > p b d s f i d = "1 3 4 " > A R T I C L E 1 3 E V E N T S O F B R E A C H C O N T R A C T A N D S E T T L E M E N T : b r b d s f i d = " 1 3 5 " > I . S e t t l e m e n t o f t h e B o r r o w e r b r e a c h o f c o n t r a c t b r b d s f i d = " 1 3 6 " > 1 . E v e n t o f b r e a c h o f c o n t r a c t : b r b d s f i d = " 1 3 7 " > ( 1 ) T h e B o r r o w e r f a i l s t o u s e t h e l o a n i n a c c o r d a n c e w i t h t h e a g r e e d u s a g e o f t h e L o a n ; b r b d s f i d = " 1 3 8 " > (2 ) T h e B o r r o w e r f a i l s t o r e p a y t h e d u e p r i n c i p a l a n d p a y t h e i n t e r e s t s , e x p e n s e s o r o t h e r p a y a b l e i n a c c o r d a n c e w i t h t h e a g r e e d t e r m o f t h i s c o n t r a c t ; b r b d s f i d = " 13 9 " > ( 3 ) T h e B o r r o w e r b r e a c h e s t h e r e p r e s e n t a t i o n a n d w a r r a n t s s e t f o r t h i n A r t i c l e 1 1 . b r b d s f i d = " 14 0 " > ( 4 ) T h e B o r r o w e r b r e a c h e s o t h e r l o a n a g r e e m e n t s o r g u a r a n t y a g r e e m e n t s o r t h e G u a r a n t o r b r e a c h t h e g u a r a n t y a g r e e m e n t w h i c h m a y m a k e i m p a c t t h e B o r r o w e r t o p e r f o r m t h e o b l i g a t i o n s u n d e r t h i s c o n t r a c t . b r b d s f i d = " 1 4 1 " > (5 ) C o n c l u s i v e e v i d e n c e t o s h o w t h a t t h e B o r r o w e r l o s e t h e c a p a c i t y o f c r e d i t o r d u r i n g p e r f o r m a n c e o f t h e o b l i g a t i o n u n d e r t h i s c o n t r a c t , t h e f i n a n c i a l c o n d i t i o n s o f t h e G u a r a n t o r a r e s e r i o u s l y d e t e r i o r a t i n g o r o t h e r r e a s o n s c a u s e d t h e G u a r a n t o r t h e c a p a c i t y o f c r e d i t d e c l i n e . b r b d s f i d = " 1 4 2 " > (6 ) T h e B o r r o w e r b r e a c h e s t h e o t h e r o b l i g a t i o n s u n d e r t h i s c o n t r a c t . b r b d s f i d = " 1 4 3 " > 2 . U n d e r t h e a b o v e c i r c u m s t a n c e s , t h e L e n d e r s h a l l h a v e r i g h t t o : b r b d s f i d = "1 4 4 " > ( 1 ) R e q u e s t t h e B o r r o w e r t o r e c t i f y w i t h i n t h e p e r i o d d e s i g n e d b y t h e L e n d e r ; b r b d s fi d = " 1 4 5 " > ( 2 ) C e a s e i n e x t e n d i n g t h e l o a n o r c a n c e l t h e c r e d i t ; b r b d s f i d = " 1 4 6 " > ( 3 ) D e c l a r e t h e l o a n u n d e r t h i s c o n t r a c t i s d u e a n d t h e L e n d e r s h a l l h a v e r i g h t t o d e d u c t t h e o u t s t a n d i n g a m o u n t f r o m t h e a c c o u n t o f t h e B o r r o w e r . T h e B o r r o w e r s h a l l n o t a p p e a l a g a i n s t t h e L e n d e r . b r b d s f i d = " 1 4 7 " > ( 4 ) D e c l a r e t h e l o a n i s d u e u n d e r o t h e r l o a n a g r e e m e n t s b e t w e e n t h e L e n d e r a n d t h e B o r r o w e r , r e q u e s t t h e B o r r o w e r t o r e p a y t h e l o a n p r i n c i p a l s , i n t e r e s t s , a n d o t h e r e x p e n s e s . b r b d s f i d = " 1 4 8 " > I I . T h e s e t t l e m e n t f o r t h e L e n d e r b r e a c h o f t h e c o n t r a c t b r b d s f i d = " 1 4 9 " > 1 . T h e L e n d e r f a i l s t o e x t e n d t h e l o a n a s a g r e e d i n t h i s c o n t r a c t w i t h o u t a n y r e a s o n s ; b r b d s f i d = " 1 5 0 " > 2 . T h e L e n d e r b r e a c h e s t h e a g r e e d i n t e r e s t r a t e a n d c o l l e c t i o n a d d i n t e r e s t s o r o t h e r f e e s ; b r b d s f i d = " 1 5 1 " > 3 . T h e L e n d e r b r e a c h e s t h e p r o v i s i o n s s e t f o r t h i n A r t i c l e 1 2 ; b r b d s f i d = " 1 5 2 " > 4 . U n d e r t h e a b o v e c i r c u m s t a n c e s , t h e B o r r o w e r s h a l l h a v e r i g h t t o : b r b d s f i d = " 1 5 3 " > ( 1 ) R e q u e s t t h e L e n d e r t o r e c t i f y ; b r b d s f i d = " 1 5 4 " > ( 2 ) R e p a y t h e l o a n a h e a d o f t i m e a n d r e f u s e t o p a y a n y c o m p e n s a t i o n f o r p r e p a y m e n t . / p > p b d s f i d = " 1 5 5 " > A R T I C L E 1 4 D E D U C T I O N b r b d s f i d = " 1 5 6 " > T h e B o r r o w e r s h a l l p a y i n f u l l f o r t h e p a y m e n t w i t h o u t a n y c o u n t e r a c t i o n o r a n y c o n d i t i o n . / p > p b d s f i d = " 1 5 7 " > A R T I C L E 1 5 A S S I G N M E N T O F T H E D E B T A N D C R E D I T b r b d s f i d = " 1 5 8 " > 1 . T h e B o r r o w e r s h a l l n o t a s s i g n i t s r i g h t a n d l i a b i l i t y u n d e r t h i s c o n t r a c t t o o t h e r t h i r d p a r t y w i t h o u t a n y w r i t t e n a p p r o v a l o f t h e L e n d e r ; b r b d s f i d = " 1 5 9 " > 2 . I n t h e e v e n t t h e B o r r o w e r a s s i g n i t s r i g h t a n d l i a b i l i t y u n d e r t h i s c o n t r a c t t o o t h e r t h i r d p a r t y u n d e r t h e w r i t t e n c o n s e n t o f t h e L e n d e r , t h e t h i r d p a r t y s h a l l a b i d e t h i s c o n t r a c t w i t h o u t a n y c o n d i t i o n . / p > p b d s f i d = " 1 6 0 " > A R T I C L E 1 6 P E R F O R M A N C E O F O B L I G A T I O N A N D W A I V E R O F R I G H T S b r b d s f i d = " 1 6 1 " > 1 . T h e B o r r o w e r i s i n d e p e n d e n t c o n t r a c t o r u n d e r t h i s c o n t r a c t , i t w i l l n o t i m p a c t b y a n y o t h e r r e l a t i o n s b e t w e e n t h eB o r r o w e r w i t h o t h e r p a r t y e x c e p t t h e o t h e r p r o v i s i o n s s e t f o r t h i n t h i s c o n t r a c t . b r b d s f i d = "1 62 " > 2 . T h e L e n d e r g i v e a n y e x t e n s i o n , t o l e r a t i o n , f a v o r t o t h e B o r r o w e r o r p e r m i t t h e B o r r o w e r t o d e l a y o f p e r f o r m a n c e a n y o b l i g a t i o n u n d e r t h i s c o n t r a c t s h a l l n o t i m p a i r a n y r i g h t s o f t h e L e n d e r i n a c c o r d a n c e w i t h t h i s c o n t r a c t a n d l a w s , r e g u l a t i o n , i t s h a l l b e d e e m e d t o h a v e w a i v e d i t s r i g h t s u n d e r t h i s c o n t r a c t a n d t h e o b l i g a t i o n s h a l l b e p e r f o r m e d b y t h e B o r r o w e r u n d e r t h i s c o n t r a c t . / p > p b d s f i d = " 1 63 " > A R T I C L E 1 7 A M E N D M E N T , S U P P L E M E N TA N D I N T E R P R E T A T I O N O F T H E C O N T R A C T b r b d s f i d = " 1 6 4 " > 1 . T h i s c o n t r a c t c o u l d b e a m e n d e d a n d s u p p l e m e n t e d u p o n t h e w r i t t e n a g r e e m e n t s c o n c l u d e b y t h e p a r t i e s . A n y a a m e n d m e n t a n d s u p p l e m e n t s h a l l b e i n t e g r a l p a r t y o f t h i s c o n t r a c t . b r b d s f i d = " 1 6 5 " > 2 . I n t h e e v e n t c h a n g e o f l a w s , r e g u l a t i o n s o r l e g a l p r a c t i c e w h i c h w i l l c a u s e a n y t e r m s c o n t a i n e d i n t h i s C o n t r a c t b e c o m e i l l e g a l , i n v a l i d o r l o s s o f p r a c t i c e , t h e o t h e r p a r t o f t h i s c o n t r a c t s h a l l n o t b e i m p a i r e d b y i t . T h e b o t h p a r t i e s s h a l l m a k e e f f o r t s t o c h a n g e t h e i l l e g a l , i n v a l i d o r l o s s o f p r a c t i c e p a r t . b r b d s f i d = " 1 6 6 " > 3 . F o r t h e m a t t e r s n o t r e f e r r e d i n t h i s c o n t r a c t s h a l l b e c o n s t r u e d i n a c c o r d a n c e w i t h t h e p r o v i s i o n s o f t h e P e o p l e sB a n k o fC h i n a . / p > p b d s f i d = " 1 6 7 " > A R T I C L E 1 8D I S P U TE R E S O L U T I O N , G O V E R N I N G L A W A N D W A I V E R OF E X E M P T I O N b r b d s f i d = " 1 6 8 " > 1 . T h e c o n c l u s i o n , i n t e r p r e t a t i o n a n d d i s p u t e r e s o l u t i o n s h a l l b e s u b j e c t t o t h e L a w s o f t h e P e o p l e s R e p u b l i c o f C h i n . T h e d i s p u t e s a r i s i n g f r o m t h e e x e c u t i o n o f t h i s c o n t r a c t s h a l l b e s e t t l e d t h r o u g h f r i e n d l y c o n s u l t a t i o n b y b o t h p a r t i e s . I n c a s e n o s e t t l e m e n t c a n b e r e a c h e d , t h e d i s p u t e s s h a l l b e s u b m i t t e d t o t h e P e o p l e s C o u r t o f t h e l o c a t i o n o f t h e L e n d e r f o r j u d g m e n t . b r b d s f i d = " 1 6 9 " > 2 . T h e B o r r o w e r s h a l l n o t r e j e c t a n y o b l i g a t i o n d u r i n g t h e s e t t l e m e n t o f d i s p u t e s . b r b d s f i d = " 1 7 0 " > 3 . T h e e x e c u t i o n a n d p e r f o r m a n c e o f t h i s c o n t r a c t a n d t h e r e l a t e d t r a n s a c t i o n i s c i v i l b e h a v i o r . T h e B o r r o w e r s h a l l n o t a p p e a l t o t a k e a c t i o n t o e x e m p t f r o m t h e o b l i g a t i o n u n d e r t h i s c o n t r a c t . b r b d s f i d = " 1 7 1 " > ( i f b o t h p a r t i e s a g r e e t o a p p l y a r b i t r a t i o n , t h e a b o v e t e r m s h a l l b e : ) b r b d s f i d = " 1 7 2 " > 1 . T h e c o n c l u s i o n , i n t e r p r e t a t i o n a n d d i s p u t e r e s o l u t i o n s h a l l b e s u b j e c t t o t h e L a w s o f t h e P e o p l e s R e p u b l i c o f C h i n . T h e d i s p u t e a r i s i n g f r o m t h e e x e c u t i o n o f t h i s c o n t r a c t s h a l l b e s e t t l e d t h r o u g h f r i e n d l y c o n s u l t a t i o n b y b o t h p a r t i e s . I n c a s e n o s e t t l e m e n t c a n b e r e a c h e d , t h e d i s p u t e s s h a l l b e s u b m i t t e d t o C h i n a I n t e r n a t i o n a l E c o n o m i c a n d t r a d e a r b i t r a t i o n c o m m i s s i o n f o r a r b i t r a t i o n . b r b d s f i d = " 1 7 3 " > 2 . T h e a r b i t r a t i o n s h a l l b e c o n d u c t e d i n a c c o r d a n c e w i t h t h e A r b i t r a t i o n L a w o f P e o p l e s R e p u b l i c o f C h i n a a n d P r o v i s i o n a l R u l e s o f P r o c e d u r e o f C h i n a i n t e r n a t i o n a l e c o n o m i c a n d t r a d e a r b i t r a t i o n c o m m i s s i o n . b r b d s f i d = " 1 7 4 " > 3 . D u r i n g t h e A r b i t r a t i o n , t h i s c o n t r a c t s h a l l b e e f f e c t i v e a n d t h e B o r r o w e r s h a l l n o t d i s c l a i m t h e a n y o b l i g a t i o n s u n d e r t h i s c o n t r a c t . b r b d s f i d = " 1 7 5 " > 4 . T h e e x e c u t i o n a n d p e r f o r m a n c e o f t h i s c o n t r a c t a n d t h e r e l a t e d t r a n s a c t i o n i s c i v i l b e h a v i o r . T h e B o r r o w e r s h a l l n o t a p p e a l t o t a k e a c t i o n t o e x e m p t f r o m t h e o b l i g a t i o n u n d e r t h i s c o n t r a c t . / p > p b d s f i d = " 1 7 6 " > A R T I C L E 1 9 O T H E R M A T T E R AG R E E D B Y TH E P A R TI E S . / p > p b d s f i d = " 1 7 7 " > A R T I C L E 2 0 A P P E N D I C E S b r b d s f i d = " 1 7 8 " > T h e f o l l o w i n g a p p e n d i c e s s h a l l b e i n t e g r a l p a r t o f t h i s c o n t r a c t : b r b d s f i d = " 1 7 9 " > 1 . D r a w - d o w n a p p l i c a t i o n 2 . / p > p b d s f i d = " 1 8 0 " > A R T I C L E 2 1 N O T I C E b r b d s f i d = " 1 8 1 " > 1 . A n y n o t i c e , p a y m e n t n o t i c e o r t e l e c o m m u n i c a t i o n s s h a l l b e f o r w a r d e d t o t h e f o l l o w i n g a d d r e s s : b r b d s f i d = " 1 8 2 " > T o : T h e B o r r o w e r : b r b d s f i d = " 1 8 3 " > A d d r e s s : b r b d s f i d = " 1 8 4 " > P o s t C o d e : b r b d s f i d = " 1 8 5 " > F a x : b r b d s f i d = " 1 8 6 " > T o : T h e L e n d e r : b rb d s f i d = " 1 8 7 " > A d d r e s s : b r b d s f i d = " 1 8 8 " > P o s t C o d e : b r b d s f i d = " 1 8 9 " > F a x : b r b d s f i d = " 19 0 " > 2 . I f a n y c h a n g e o f a d d r e s s s h a l l i n f o r m t h e o t h e r p a r t y i m m e d i a t e l y . b r b d s f i d = " 1 9 1 " > 3 . A n y n o t i c e , p a y m e n t r e q u e s t o r c o m m u n i c a t i o n s h a l l b e f o r w a r d e d t o t h e a b o v e a d d r e s s . T h e d a t e s o n w h i c h n o t i c e s s h a l l b e d e e m e d t o h a v e b e e n e f f e c t i v e l y g i v e n s h a l l b e d e t e r m i n e d a s f o l l o w s : b r b d s f i d = " 1 9 2 " > ( 1 ) I f g i v e n i n l e t t e r i t s h a l l b e d e e m e d e f f e c t i v e l y g i v e n o n t h e f i f t h d a y a f t e r t h e d a t e m a i l e d b y r e g i s t e r e d a i r m a i l , p o s t a g e p r e p a i d ; b r b d s f i d = " 1 9 3 " > ( 2 ) I f g i v e n b y t e l e x i t s h a l l b e d e e m e d e f f e c t i v e l y g i v e n o n t h e d a t e t h e o t h e r p a r t y r e t u r n e d t h e i n f o r m a t i o n ; b r b d s f i d = " 1 9 4 " > ( 3 ) I f g i v e n b y f a c s i m i l e i t s h a l l b e d e e m e d e f f e c t i v e l y g i v e n o n t h e f i r s t d a t e o f t r a n s m i s s i o n ; b r b d s f i d = " 1 9 5 " > ( 4 ) I f g i v e n b y p e r s o n a l d e l i v e r y i t s h a l l b e d e e m e d e f f e c t i v e l y g i v e n o n t h e d a t e o f p e r s o n a l d e l i v e r y ; b r b d s f i d = " 1 9 6 " > T h i s c o n t r a c t b e c o m e e f f e c t i v e a f t e r s i g n e d b y t h e a u t h o r i z e d r e p r e s e n t a t i v e s o f b o t h p a r t ie s u n t i l t h e l o a n a n d t h e i n t e r e s t s a n d o t h e r r e l a t e d e x p e n s e s b e c l e a r e d u p . b r b d sf i d = " 1 97 " > T h i s c o n t r a c t i s e x e c u t e d i n _ _ _ _ _ o r i g i n a l a n d b e e q u a l l y a u t h e n t i c . E a c h o f t h e B o r r o w e r , t h e L e n d e r s h a l l h o l d _ _ _ _ c o p y . b r b d s f i d = " 1 9 8 " > B o r r o w e r : b r b d s f i d = " 1 9 9 " > L e n d e r : / p > / d i v > / d i v > d i v b d s f i d = " 2 0 0 " > i f r a m e w i d t h = " 6 4 0 " f r a m e b o r d e r = " 0 " h e i g h t = " 3 0 0 " s c r o l l i n g = " n o " s r c = " / / p o s . b a i d u . c o m / s ? w i d = 6 4 0 &a m p ; h e i = 3 0 0 &a m p ; d i = u 4 9 1 5 4 9 3 &a m p ; s 1 = 3 4 8 1 1 9 4 4 7 7 &a m p ; s 2 = 2 8 5 3 3 7 7 9 0 9 &a m p ; l t u = h t t p s % 3 A % 2 F % 2 F m . 5 1 t e s t . n e t % 2 F s h o w % 2 F 3 5 6 1 9 5 7 . h t m l &a m p ; t r = 1 6 3 7 4 1 0 3 9 9 &a m p ; m t = 9 0 8 1 5 4 9 5 a e 7 f c 3 c 8 &a m p ; d c = 3 &a m p ; t i = % E 8 % 8 B % B 1 % E 6 % 9 6 % 8 7 % E 7 % 8 9 % 8 8 % E 5 % 8 0 % 9 F % E 6 % A C % B E % E 5 % 9 0 % 8 8 % E 5 % 9 0 % 8 C % E 8 % 8 C % 8 3 % E 6 % 9 C % A C &a m p ; p s = 1 1 4 1 7 x 4 8 0 &a m p ; d r s = 4 &a m p ; p c s = 1 6 0 0 x 1 6 0 0 &a m p ; p s s = 1 6 0 0 x 1 3 2 4 2 &a m p ; c f v = 0 &a m p ; c p l = 0 &a m p ; c h i = 2 &a m p ; c c e = t r u e &a m p ; c e c = G B K &a m p ; t l m = 1 6 3 3 8 7 1 4 6 4 &a m p ; p s r = 1 6 0 0 x 1 6 0 0 &a m p ; p a r = 1 6 0 0 x 1 6 0 0 &a m p ; p i s = - 1 x - 1 &a m p ; c c d = 2 4 &a m p ; c j a = f a l s e &a m p ; c m i = 0 &a m p ; c o l = z h - C N &a m p ; c d o = - 1 &a m p ; t c n = 1 6 3 7 4 1 0 4 0 0 &a m p ; d t m = H T M L _ P O S T &a m p ; t p r = 1 6 3 7 4 1 0 3 9 9 4 2 9 &a m p ; a r i = 2 &a m p ; a n t = 0 &a m p ; p s i = e 6 2 8 6 f 1 c 6 6 9 e d 1 0 1 &a m p ; e x p s = 1 1 0 2 5 7 , 1 1 0 0 0 9 , 1 1 1 0 0 0 , 1 1 0 0 11 &a m p ; p r o t =2 &a m p ; d i s = 0 &a m p ; d a i = 5 &a m p ; d r i = 0 " b d s f i d = " 2 0 1 " > / i f r a m e > / d i v > s c r i p t id = " s h o w _ g _ d 1 " s r c = " / / m 1 . 5 1 k a o w a n g . c o m / p r o d u c t i o n / n ie / q / r e s o u r c e / rf / e _ q a . j s " b d。

关于贷款的相关英语作文Title: The Importance of Understanding Loans。

Loans are an essential part of modern life, allowing individuals and businesses to access the funds they need to achieve their goals. However, it's important to have a clear understanding of how loans work, as well as the potential risks and benefits involved. In this essay, we will explore the various types of loans, their uses, and the key factors to consider when taking out a loan.First and foremost, it's important to understand the different types of loans available. There are several common types of loans, including personal loans, car loans, home loans, and business loans. Each type of loan is designed for a specific purpose, and comes with its own set of terms and conditions. For example, a personal loan is typically used for personal expenses such as medical bills or home renovations, while a car loan is specifically for purchasing a vehicle.When considering taking out a loan, it's important to carefully consider the terms and conditions of the loan. This includes the interest rate, the repayment period, and any additional fees or charges. The interest rate is a crucial factor to consider, as it will determine the total amount of interest that will be paid over the life of the loan. Additionally, the repayment period will determine the monthly repayment amount, and the total cost of the loan.Another important factor to consider when taking out a loan is the potential risks and benefits involved. While loans can provide access to much-needed funds, they also come with certain risks. For example, if a borrower is unable to make their loan repayments, they may face financial difficulties and damage to their credit score. On the other hand, loans can also provide an opportunity to invest in education, start a business, or purchase a home, which can lead to long-term financial benefits.In conclusion, loans are an important financial tool that can provide access to the funds needed to achieveimportant goals. However, it's crucial to have a clear understanding of the different types of loans, their terms and conditions, and the potential risks and benefits involved. By carefully considering these factors, individuals and businesses can make informed decisions about taking out a loan, and ensure that they are able to manage their finances effectively.。

英语作文贷款的利弊题目Title: The Pros and Cons of Loans。

Loans play a significant role in our modern economy, providing individuals and businesses with financial assistance to achieve various goals. However, like any financial tool, loans come with both advantages and disadvantages.Pros:1. Immediate Access to Funds: One of the most apparent benefits of loans is the immediate access to funds they provide. Whether it's for purchasing a home, starting a business, or covering unexpected expenses, loans offer a quick solution to financial needs.2. Facilitate Investments: Loans enable individuals and businesses to make investments they might not otherwise afford. This could include acquiring assets like realestate or equipment, which can potentially generate income or increase productivity in the long run.3. Build Credit History: Responsibly managing a loan can help individuals build a positive credit history. Timely repayments demonstrate reliability to lenders, which can be beneficial for future borrowing at favorable terms.4. Flexible Repayment Options: Many loans offerflexible repayment terms, allowing borrowers to choose a repayment schedule that suits their financial situation. This flexibility can ease the burden of repayment and accommodate fluctuations in income.5. Tax Benefits: In some cases, the interest paid on certain types of loans, such as mortgages or student loans, may be tax-deductible. This can result in significant savings for borrowers, effectively reducing the cost of borrowing.Cons:1. Accrued Interest: One of the most significant drawbacks of loans is the accrual of interest over time. Borrowers end up paying back more than the original loan amount, increasing the overall cost of borrowing.2. Risk of Default: Failure to repay a loan can have severe consequences, including damage to credit scores, legal action by lenders, and potential loss of collateral. Defaulting on a loan can have long-lasting financial repercussions and hinder future borrowing opportunities.3. Debt Burden: Taking on too much debt can lead to a significant financial burden, with monthly repayments consuming a large portion of income. High levels of debt can restrict financial freedom and limit opportunities for saving and investment.4. Impact on Credit Score: Missing loan payments or defaulting on a loan can damage an individual's credit score, making it harder to qualify for future loans or obtain favorable interest rates. A poor credit score can also affect other aspects of financial life, such asrenting an apartment or securing insurance.5. Dependency on Lenders: Relying on loans to finance expenses can create a dependency on lenders and perpetuate a cycle of debt. Overreliance on borrowing can hinder financial independence and make individuals vulnerable to economic downturns or changes in interest rates.In conclusion, while loans offer a valuable resource for achieving financial goals and addressing immediate needs, they also come with inherent risks and costs. It's essential for borrowers to carefully weigh the advantages and disadvantages of borrowing and to borrow responsibly within their means. Additionally, understanding the terms and conditions of a loan agreement is crucial to avoid potential pitfalls and ensure a positive borrowing experience.。

Multiple ChoicesDialog 1W: Hi, Mike. Why do you look puzzled?M: I’ve learned that there are four big commercial banks in your country.Would you please tell me what they are?W: Yes, it is a pleasure. They are Bank of China, China Construction Bank,Industrial and Commercial Bank of China and Agricultural Bank ofChina.M: So, does CCB refer to China Construction Bank?W: I don’t see any reason why not. You can simply call them respectivelyBOC, CCB, ICBC and ABC.Question: Which of the following is NOT among the four major commercial banks of China? (D) 译文女：你好！麦克。

为什么一脸困惑呀？男：我知道你们国家有四大商业银行，请你告诉我是哪几家，好吗？女：行，乐意效劳。

这四大商业银行是中国银行、中国建设银行、中国工商银行和中国农业银行。

男：所以CCB 是指中国建设银行吗？女：一点不错。

你可以简单地分别称它们BOC, CCB, ICBC 和ABC。

Dialog 2M: It is reported that some joint-stock banks have been established in severalmajor cities.W: Exactly. They are allowed to offer various banking services to individualsand businesses just as the four big commercial banks do.M: You said it. Can you tell me some joint-stock banks?W: It is no sweat. China Minsheng Banking Corp. Ltd., China Citic Bank,Industrial Bank Co., Ltd., and Guangdong Development Bank are all joint stockbanks.M: What about Shenzhen Development Bank?W: Of course it is one of them.Question: Which of the following is NOT mentioned in their conversation? (A)译文男：有报道说在一些大城市已经建立了数家股份制银行。

以字母S 为首的金融英语词汇
导语：金融的英语词汇有很多，下面是YJBYS 小编收集整理的以
字母S 为首的金融英语词汇，欢迎参考。

Special stock 特种股票
Spin-off 资产分拆
Spot market 现货市场
Spot price 现货价格
Spread 差额; 差价
Sprint period 冲刺期
Stall speed 失速
Standard Poor 标准普尔
Startup financing 创办资金融通
Startup stage [投资] 创建期
State-owned enterprise 国有企业
State shares 国家股
Stock Broker 股票经纪
Stock Exchange Alternative Trading System 证券交易所另项交易系统
Stock Exchange Automated
Quotations System 证券交易所自动报价系统
Stockholm Options Market 斯德哥尔摩期权市场
Stock Market 股票市场;股市
Stock Trader, Stock Trading 股票交易商;股票买卖
Stocks 股票;股份
Stop loss limit 止蚀限额。