This paper examines the dynamic allocation of control rights in private debt contracts of firms that repeatedly borrow in the syndicated loan market. We show that a covenant violation in the prior loan contract provides a signal to creditors which results in stricter contract terms for the...

Using highly detailed data on the loan portfolios of large U.S. banks, we document that these banks "specialize" by concentrating their lending disproportionately into one industry. This specialization improves a bank’s industry-specific knowledge and allows it to offer generous loan terms to...

We identify a group of lenders specializing in syndicating tradable loans (referred to as transactional lenders, “TLs”). We show that borrowers borrowing from TLs experience worse operating performance and more severe credit quality deterioration after loan origination compared to those...

More than 80% of U.S. syndicated loans contain at least one fee type and contracts typically specify a menu of spreads and fee types. We test the predictions of existing theories on the main purposes of fees and provide supporting evidence that: (1) fees are used to price options embedded in...

We make use of Shared National Credit Program (SNC) data to examine syndicated loans in which the lead arranger retains no stake. We find that the lead arranger sells its entire loan share for 27 percent of term loans and 48 percent of Term B loans, typically shortly after syndication. In...

Using a borrower firm’s relationship bank becoming a member of the Task Force on Climate-Related Financial Disclosures (TCFD) and thus committing to more transparent climate-related disclosures as a plausible exogeneous shock, we examine whether and how lenders’ commitment to climate-related...

Using lenders becoming members of the Task Force on Climate-Related Financial Disclosures (TCFD) as a plausible exogeneous shock, we examine whether and how lenders’ commitment to transparent climate-related disclosures affects borrower firms’ environmental performance. We find that client...

We examine changes in the corporate tax rate across the U.S. and their implications on the pricing and quantity of loans. We find an asymmetric effect on the cost of credit: loan spreads decrease by approximately 5.9 basis points in response to a one percentage tax cut, but they are insensitive...

This paper examines the effects of cross-border bank mergers on the risk and (abnormal) returns of acquiring banks. We find that overall, the acquirers´ risk neither increases nor decreases. In particular, on average neither their total risk nor their systematic risk falls relative to banks in...

This paper examines the price reaction of loans relative to bonds prior to and surrounding information intensive events, such as corporate (loan and bond) defaults, and bankruptcies using a unique dataset of daily secondary market prices of loans. Specifically, we find that risk-adjusted loan...