strategically utilize the renegotiation option as a bankruptcy threat, pushing down the debt value below the potential liquidation … renegotiation option. In the model, creditors decide when to withdraw their funding and equityholders can renegotiate the contract … value of the firm. In such a scenario, a deterred default resulting from emergency capital injections could be detrimental …

funds. Our results are consistent with an investor-perceived reduction in default probabilities; and suggest that liftoff …

-perceived reduction in default probabilities; and suggest that liftoff provided a strong, positive signal about the future solvency of …

-perceived reduction in default probabilities; and suggest that liftoff provided a strong, positive signal about the future solvency of …

' current debt service ratio. In doing so we address gaps in the existing literature on modelling default and stress testing … increase in new default flows. We also test for heterogeneous effects across households and find younger, low income households …