large debt financing syndicated loans versus corporate bonds

4. Data and methodology
The sample includes information on 1,377 listed non-financial firms with their head
offices in the euro area and covers the period 1993-2006. We construct our dataset by
combining data from four different commercial data providers: Thomson One Banker,
Dealogic Loanware, Dealogic Bondware and Eurostat. In constructing the dataset,
using Loanware and Bondware we first identify the firms that borrowed through
syndicated loans and/or issued bonds during our sample period. Both databases
provide extensive individual deal-by-deal information on all public corporate bond
issues and syndicated loans granted. We obtain information on borrowers’
characteristics from their balance sheets and profit and loss accounts through
Thomson One Banker. Company identification indicators (such as Sedol and ISIN
codes) are utilized to match the Dealogic’s databases with Thomson One Banker. We
also hand-matched those companies that lack identification indicators. Lastly, we use
Eurostat to obtain official statistics on macroeconomic data.
We subdivide the firms in our sample among four categories, according to their
borrowing record within the sample period. Firms are allocated to categories based on
whether they issued: (I) only syndicated loans, (II) only bonds, (III) both syndicated
loans and bonds in different years, and (IV) both syndicated loans and bonds at least
once within the same year. Sample characteristics are reported in Table 1.
Borrowers that used the syndicated loan market only are, on average, larger than those
that borrowed exclusively through bond markets. In contrast, firms using only
corporate bond financing have lower current profits but are better valued by the
market, invest more, carry less financial leverage and have higher levels of debt
maturing in the short term (debt maturing in less than one year). In other words, they
would seem to be smaller firms with a strong growth potential. Likewise, as expected,
firms tapping these two markets (Categories III and Category IV) are much larger
than firms that use only one of the instruments. With an average size of USD 9.9
billion, firms in Category IV have the borrowing needs and are large enough (i.e.
normally better known by lenders) to be able to use both the bond and syndicated loan
markets extensively. Between 1993 and 2006, these 164 firms issued 175 syndicated
loans and 311 bonds in different years, and there were 288 instances in which these
ECB
Working Paper Series No 1028
March 2009
13