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Acharya, Viral V.; Gale, Douglas; Yorulmazer, Tanju - National Bureau of Economic Research (NBER) - 2010

event of default, the creditors can seize the collateral. We assume that there is a small cost of liquidating the assets …. The debt capacity of the assets (the maximum amount that can be borrowed using the assets as collateral) depends on the …

Persistent link: https://www.econbiz.de/10008601707

Hedge Fund Leverage

Ang, Andrew; Gorovyy, Sergiy; Inwegen, Gregory B. van - National Bureau of Economic Research (NBER) - 2011

We investigate the leverage of hedge funds in the time series and cross section. Hedge fund leverage is counter-cyclical to the leverage of listed financial intermediaries and decreases prior to the start of the financial crisis in mid-2007. Hedge fund leverage is lowest in early 2009 when the...

Persistent link: https://www.econbiz.de/10008839465

Collateral Pricing

Benmelech, Efraim; Bergman, Nittai K. - National Bureau of Economic Research (NBER) - 2008

We examine how collateral affects the cost of debt capital. Theories based on borrower moral hazard and limited … pledgeable income predict that collateral increases the availability of credit and reduces its price. Testing these theories is … complicated by the very selection problem which they imply: creditors will demand collateral precisely from those borrowers who …

Persistent link: https://www.econbiz.de/10005088753

Credit Default Swaps and the Credit Crisis

Stulz, René M. - National Bureau of Economic Research (NBER) - 2009

Many observers have argued that credit default swaps contributed significantly to the credit crisis. Of particular concern to these observers are that credit default swaps trade in the largely unregulated over-the-counter market as bilateral contracts involving counterparty risk and that they...

Persistent link: https://www.econbiz.de/10008634652

Macroeconomic Conditions and the Puzzles of Credit Spreads and Capital Structure

Chen, Hui - National Bureau of Economic Research (NBER) - 2010

I build a dynamic capital structure model that demonstrates how business-cycle variations in expected growth rates, economic uncertainty, and risk premia influence firms' financing and default policies. Countercyclical fluctuations in risk prices, default probabilities, and default losses arise...

Persistent link: https://www.econbiz.de/10008615795

Implicit Guarantees and Risk Taking: Evidence from Money Market Funds

Kacperczyk, Marcin; Schnabl, Philipp - National Bureau of Economic Research (NBER) - 2011

A firm's termination generates bankruptcy costs. This may create incentives for a firm's owner to bail out a firm in bankruptcy and to curb the firm's risk taking outside bankruptcy. We analyze the role of such implicit guarantees in the context of financial institutions that sponsor money...

Persistent link: https://www.econbiz.de/10009251486

Fire Sales in Finance and Macroeconomics

Shleifer, Andrei; Vishny, Robert W. - National Bureau of Economic Research (NBER) - 2010

Fire sales are forced sales of assets in which high-valuation bidders are sidelined, typically due to debt overhang problems afflicting many specialist bidders simultaneously. We overview theoretical and empirical research on asset fire sales, which shows how they can arise, how they can lead to...

Persistent link: https://www.econbiz.de/10008776830

Self-Fulfilling Credit Market Freezes

Bebchuk, Lucian; Goldstein, Itay - National Bureau of Economic Research (NBER) - 2010

This paper develops a model of a self-fulfilling credit market freeze and uses it to study alternative governmental responses to such a crisis. We study an economy in which operating firms are interdependent, with their success depending on the ability of other operating firms to obtain...

Persistent link: https://www.econbiz.de/10008635935

Repairing a Mortgage Crisis: HOLC Lending and its Impact on Local Housing Markets

Courtemanche, Charles; Snowden, Kenneth A. - National Bureau of Economic Research (NBER) - 2010

The Home Owners' Loan Corporation purchased more than a million delinquent mortgages from private lenders between 1933 and 1936 and refinanced the loans for the borrowers. Its primary goal was to break the cycle of foreclosure, forced property sales and decreases in home values that was...

Persistent link: https://www.econbiz.de/10008548780

Investment-Based Underperformance Following Seasoned Equity Offerings

Zhang, Lu; Lyandres, Evgeny; Sun, Le - National Bureau of Economic Research (NBER) - 2005

Adding a return factor based on capital investment into standard, calendar-time factor regressions makes underperformance following seasoned equity offerings largely insignificant and reduces its magnitude by 37-46%. The reason is that issuers invest more than nonissuers matched on size and...

Persistent link: https://www.econbiz.de/10005580565

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