NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Loans on sale: Credit market seasonality, borrower need, and lender rents

Justin Murfin, Mitchell Petersen

NBER Working Paper No. 20310
Issued in July 2014, Revised in December 2015
NBER Program(s):Corporate Finance Program, Industrial Organization Program

The market for corporate credit is characterized by significant seasonal variation, both in interest rates and the volume of new lending. Firms borrowing from banks during seasonal "sales" in late spring and fall issue at 19 basis points cheaper than winter and summer borrowers. Issuers during cheap seasons appear to have less immediate or uncertain needs, but are enticed by low rates to engage in precautionary borrowing. High interest rate periods capture borrowers with unanticipated, non-deferrable investment needs. Consistent with models of intertemporal price discrimination, seasonality is strongly associated with market concentration among a few large banks with repeated interactions.

download in pdf format
   (474 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w20310

Published: Justin Murfin & Mitchell Petersen, 2016. "Loans on sale: Credit market seasonality, borrower need, and lender rents," Journal of Financial Economics, . citation courtesy of

Users who downloaded this paper also downloaded* these:
Kilenthong and Townsend w20275 A Market Based Solution to Price Externalities: A Generalized Framework
Knight w20311 An Econometric Evaluation of Competing Explanations for The Midterm Gap
Dang, Gorton, Holmstrom, and OrdoƱez w20255 Banks as Secret Keepers
Davis and Van Nieuwerburgh w20287 Housing, Finance and the Macroeconomy
Breza, Chandrasekhar, and Larreguy w20309 Social Structure and Institutional Design: Evidence from a Lab Experiment in the Field
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us