Similar Search Results

On Moral Hazard and Persistent Private Information

Vasama, Suvi - 2017

I examine a simple model of dynamic moral hazard in which the agent has persistent private information. I show that despite the complexity of the framework, the problem has a simple solution that can be found using standard methods. The incentives at the optimal contract can be captured using...

Persistent link: https://www.econbiz.de/10012950499

Optimal Lending Contract with Uncertainty Shocks

Villacorta, Alonso - 2014

behavior. A line of credit appears in the optimal long term contract similar to (DeMarzo and Fishman, 2007). The novelty of the … contract is that the credit limit varies over time, as a function of the state of volatility. Credit limit does not vary … monotonically over firms. When uncertainty increases, credit limits are reduced for highly constraint firms, because the frictions …

Persistent link: https://www.econbiz.de/10013060348

Debt Contracts with Partial Commitment

Kovrijnykh, Natalia - 2014

investment dynamics with partial commitment drastically differ from those with full and no commitment. In particular, investment …

Persistent link: https://www.econbiz.de/10013064322

Financial Contracting Along the Business Cycle'

Attar, Andrea - 2007

The paper investigates the effects of macroeconomic conditions on firms' capital structure. We introduce a repeated lender-borrower interaction that allows for debt and equity financing to co-exist as optimal securities in every period. The presence of asymmetric information in the market for...

Persistent link: https://www.econbiz.de/10014050325

Collateralized Debt as the Optimal Contract

Lacker, Jeffrey M. - 2012

In a simple risk-sharing environment with ex post private information, conditions are found under which a collateralized debt contract is the optimal allocation. The critical condition for optimality is that the borrower values the collateral good more highly than does the lender; otherwise the...

Persistent link: https://www.econbiz.de/10013102607

Managerial Biases and Debt Contract Design : The Case of Syndicated Loans

Adam, Tim - 2018

We examine whether managerial overconfidence impacts the use of performance-pricing provisions in loan contracts (PSD). Managers with biased views may issue PSD because they consider this form of debt to be mispriced. Our evidence shows that overconfident managers are more likely to issue...

Persistent link: https://www.econbiz.de/10012940196

Renegotiation Costs and Debt Contract Design

Ferracuti, Elia - 2018

We exploit plausibly exogenous variation in the tax consequences of renegotiating U.S. syndicated loans to isolate the effect of renegotiation costs on initial contract terms. TD9599 materially reduced the tax burden of renegotiating U.S. syndicated loans, while leaving the taxation of...

Persistent link: https://www.econbiz.de/10012933816

CEO Contractual Protection and Debt Contracting

Chen, Xia; Cheng, Qiang; Lo, Alvis K.; Wang, Xin - 2022

CEO contractual protection, in forms of CEO employment agreements and CEO severance pay agreements, is prevalent among S&P 1500 firms. While prior research has examined the impact of these agreements on corporate decisions from shareholders’ perspective, there is little research on the impact...

Persistent link: https://www.econbiz.de/10014235938

Debt covenant renegotiation and investment

Arnold, Marc; Westermann, Ramona - 2015

, the model reflects empirical credit spread patterns, rationalizes the observed joint distribution of corporate events and … generates novel implications for the impact of renegotiable debt on covenant and investment policies …

Persistent link: https://www.econbiz.de/10011345070

Borrower Private Information Covenants and Loan Contract Monitoring

Carrizosa, Richard - 2017

Prior research finds that commercial borrowers provide lenders with private information. This research generally does not identify how lenders obtain such information or the types of information obtained, however, limiting the directness and interpretability of tests of lenders' use of the...

Persistent link: https://www.econbiz.de/10012971965

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