Topic: Filling the Monitoring Void: Lead Arranger Distraction and Borrower Disclosure

Date & Time: 14:15-15:30  May 6, 2026

Venue: 245 Room Quanxue Building

Organizers: School of Accounting, Dongbei University of Finance and Economics; Liaoning Province Capital Market Finance and Accounting Graduate Innovation and Academic Exchange Center

Abstract：

This study examines how syndicated loan borrowers adjust disclosure behavior when their lead lenders are distracted by other borrowers in their portfolios. We posit that non-lead loan syndicate participants seek alternative sources of information from borrowers to compensate for reduced monitoring by lead arrangers. Using debt covenant violations of other borrowers in lenders’ portfolios as a proxy for lead arranger “distraction”, we show that borrowers with distracted lead arrangers issue more forward-looking guidance. This effect is more pronounced when syndicate participants possess greater bargaining power, face heightened information needs, or are exposed to higher credit risks, consistent with increased syndicate participant-driven demand for information. We further find that lender distraction is associated with more stringent loan terms in subsequent lending. These results are robust to alternative specification and distraction measures. Overall, our findings offer new insights into the monitoring role of non-lead lenders in the syndicated loan market, a topic previously unexplored in the debt contracting literature.

Introduction of Speaker:

Xiong LI is a specially appointed Associate Professor at the School of Management and the School of Business and Technology, University of Science and Technology of China, and a master's supervisor. He received his PhD from The University of Hong Kong and was a visiting scholar at Washington University in St. Louis, USA. His primary research area is supply chain finance.