The use of intangible assets as loan collateral.

摘要

This dissertation investigates the role of intangibles in reducing financing frictions in credit markets and examines whether intangible collateralization is associated with risky lending in the corporate loan market by using a sample of secured syndicated loans. While the predominant managerial and scholarly perspective suggests that intangible assets are not eligible collateral, I find that twenty-one percent of U.S.-originated secured loans include intangible assets as loan collateral, and the collateralization of intangibles has significantly increased in the recent decade. I hypothesize and find that intangible redeployability and borrower reputation are positively related to the probability of using intangibles as loan collateral. I further hypothesize and find that collateralizing loans by intangibles significantly increases loan pricing and the supply of credit to firms. Moreover, loans secured by intangibles perform no worse to other secured loans. Finally, I triangulate these results using evidence from two field studies in a finance company and a private fund that collateralize and appraise trademarks and patents in liquidation. Overall, I provide evidence in favor of the hypothesis that intangible asset collateralization is an innovation in credit markets that alleviates financing frictions.