The Determinants of Bank Loan Pricing

If we are armed solely with a bond’s credit rating and a riskfree interest rate for its term or duration, we can come reasonably close to estimating the interest rate required on a risky bond. Bank loans are priced very differently, and respond to a much larger number of variables. Bank loans are generally priced at floating rates of interest, using a spread above a time-varying benchmark ... ................
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