We investigate how credit default swaps (CDSs) affect lenders’ incentives to initiate new lending relationships. We predict that CDSs reduce adverse selection that nonrelationship lead arrangers face when competing for loans. Consistently, we find that a loan is more likely to be syndicated by a nonrelationship lead arranger following CDS trading initiation on a borrower’s debt. We also show that borrowers that obtain loans from nonrelationship lead arrangers in the post-CDS trading initiation period are more opaque, in line with the effect of CDSs being more pronounced for borrowers for which adverse selection costs are higher. Further analyses show that, relative to relationship lead arrangers, nonrelationship lead arrangers have lower monitoring incentives in the post-period, as reflected by less restrictive covenants and performance pricing provisions they impose and by the reduced loan shares they retain. Moreover, we find that borrowers of nonrelationship lead arrangers following CDS trading initiation have higher growth opportunities and more volatile operations, consistent with such borrowers benefiting more from weaker restrictions on their activities imposed by lenders. Lastly, lower monitoring incentives of CDS-protected nonrelationship lead arrangers also decrease the propensity of inexperienced participants to join their syndicates. Overall, our findings suggest that CDS trading significantly changes nonrelationship lending dynamics.

我们调查信用违约掉期（CDS）如何影响贷方发起新的激励措施借贷关系。我们预测CDS会减少非关系牵头安排人在竞争贷款时面临的逆向选择。一致地，我们发现，在借方债务的CDS交易启动后，非关系牵头安排人更可能将贷款联合提供银团。我们还表明，在CDS交易开始后的时期从非关系牵头安排行获得贷款的借款人更加不透明，这与逆向选择成本较高的借款人对CDS的影响更为明显。进一步的分析表明，相对于关系牵头安排人而言，非关系牵头安排人在后期具有较低的监督激励作用，这体现在限制性条款和绩效定价条款的限制较少以及所保留的贷款份额减少上。而且，我们发现，在CDS交易开始后，非关系牵头安排行的借款人拥有更高的增长机会和更不稳定的业务，这与此类借款人从放贷人对其活动施加的较弱限制中受益更多。最后，较低的CDS保护的非关系牵头安排者的监测激励措施还降低了缺乏经验的参与者加入其集团的倾向。总体而言，我们的发现表明CDS交易显着改变了非关系借贷的动态。较低的CDS保护的非关系牵头安排者的监测激励措施也降低了缺乏经验的参与者加入其集团的倾向。总体而言，我们的发现表明CDS交易显着改变了非关系借贷的动态。较低的CDS保护的非关系牵头安排者的监测激励措施也降低了缺乏经验的参与者加入其集团的倾向。总体而言，我们的发现表明CDS交易显着改变了非关系借贷的动态。