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Developing country economic structure and the pricing of syndicated credits.

We use a hedonic pricing model to analyse in a risk--return framework the determinants of the pricing of a sample of over 5,000 syndicated credits granted to developing country borrowers between 1993 and 2001. We conclude that syndicated loans with riskier characteristics or granted to riskier borrowers are more expensive than others, although the effect of purely micro-economic price determinants is in several instances weaker when variables reflecting macro-economic conditions in borrowers' countries are introduced into the model. In addition to individual loan or borrower considerations, lenders seem to focus more on macroeconomic factors to determine the pricing of their loans, such ...

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