We document a novel trend in syndicated lending where some participants voluntarily waive their rights to borrowers' private information. We posit that “public-side” lending emerged to facilitate broad lender participation in the syndicated loan market by mitigating concerns about the leakage of borrowers' private information into public securities markets. In line with this proposition, we find that public-side lending facilitates the loan market participation of lenders for which maintaining robust information barriers is particularly costly. Furthermore, while public-side lending increases within-syndicate information asymmetry, our findings indicate that it does not materially increase interest spreads and is associated with lower coordination costs among syndicate participants. Collectively, we document how debt contracting practices evolved to address frictions associated with the protection of borrowers’ private information and the related changes in loan contracting equilibria.

我们记录了银团贷款的一个新趋势，一些参与者自愿放弃对借款人私人信息的权利。我们认为，“公共侧”贷款的出现是为了通过减轻对借款人私人信息泄露到公共证券市场的担忧，促进贷款人广泛参与银团贷款市场。根据这一主张，我们发现公共贷款促进了贷款人参与贷款市场，而维持强大的信息壁垒的成本特别高。此外，尽管公共部门贷款在银团内部增加信息不对称，我们的研究结果表明，它不会实质性地增加利差，并且与银团参与者之间较低的协调成本相关。总的来说，我们记录了债务合同实践如何演变，以解决与保护借款人私人信息相关的摩擦以及贷款合同平衡的相关变化。