Discussion paper

DP14892 The Dollar and Corporate Borrowing Costs

We show that U.S. dollar movements affect syndicated loan terms for U.S. borrowers, even for those without trade exposure. We identify the effect of dollar movements using spread and loan amount adjustments during the syndication process. Using this high-frequency, within loan variation, we find that a one standard deviation increase in the dollar index increases spreads by up to 15 basis points and reduces loan amounts and underpricing by up to 2 percent and 7 basis points, respectively. These effects are concentrated in dollar appreciations. Our results suggest that global factors reflected in the dollar determine U.S. borrowing costs.


Meisenzahl, R, F Niepmann and T Schmidt-Eisenlohr (2020), ‘DP14892 The Dollar and Corporate Borrowing Costs‘, CEPR Discussion Paper No. 14892. CEPR Press, Paris & London. https://cepr.org/publications/dp14892