As with the regressions for covenant tightness, the distance between the borrower and the nearest syndication active bank or its syndication active predecessor serves as an instrument for relationship status. Since the relationship intensity variables also measure the exclusivity of the relationship, I construct a second instrument to ad- dress the likelihood of forming multiple relationships as opposed to one relationship. This instrument is the number of syndication active banks within a one-hundred-mile radius around the borrower’s headquarters at the time the loan is made. If a borrower has multiple potential lead lenders nearby, the likelihood of forming multiple relation- ships should increase. Finally, as a third instrument I use the distance between the borrower and the nearest highly syndication active bank. Banks with high capacity for syndicating loans potentially are better able to form persistent relationships with their borrowers. A bank is defined as highly syndication active in year t if it is among the top three syndication active banks in that year.