(Revised June 2026)

Originate-to-distribute lending weakens banks’ incentives to produce information about borrowers, but it may also strengthen loan investors’ incentives to produce such information. We show that in leveraged loan syndications, pricing adjustments in response to investor demand during bookbuilding are informative about borrower credit quality. Upward spread adjustments predict higher default rates and larger realized losses given default. After syndication, banks revise their confidential supervisory risk assessments accordingly, consistent with learning about borrowers from investors. These patterns suggest that bookbuilding transmits investors’ credit information into loan pricing and bank beliefs, partly mitigating the informational drawback of originate-to-distribute lending.