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Debt covenant renegotiation and investment

Arnold, Marc; Westermann, Ramona - 2015

generates novel implications for the impact of renegotiable debt on covenant and investment policies …

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

(Debt) overhang : evidence from resource extraction

Wittry, Michael D. - 2019

ex ante measures of investment opportunities and important variation in the terms of a firm's obligations. In particular … investments. Traditional debt, in contrast, imposes few overhang-related investment distortions. These results show that: (i) the …

Persistent link: https://www.econbiz.de/10012168933

Equilibrium Defaultable Corporate Debt and Investment

Chen, Hong; Frank, Murray Z. - 2022

In dynamic capital structure models with an investor break-even condition, the firm's Bellman equation may not generate a contraction mapping, so the standard existence and uniqueness conditions do not apply. First, we provide an example showing the problem in a classical trade-off model. The...

Persistent link: https://www.econbiz.de/10013295044

Investment Opportunities and Corporate Debt Policy : New Economy Firms Versus Old Economy Firms

Chaibi, Hasna - 2013

This paper examines the impact of the New Economy on the relationship between corporate debt policy and firm investment … opportunities. One distinctive feature of new economy firms is their high level of investment opportunities. We study whether the … impact of investment opportunities on corporate debt policy is different in new economy firms, compared to traditional ones …

Persistent link: https://www.econbiz.de/10013093857

Corporate debt structure over the global credit cycle

Boyarchenko, Nina; Elias, Leonardo - 2024

We study the determinants of active debt management through issuance and refinancing decisions for firms around the world. We leverage instrument-level data to create a comprehensive picture of the maturity, currency, and security type composition of firms' debt for a large cross-section of...

Persistent link: https://www.econbiz.de/10015154729

Heterogeneity in corporate debt structures and the transmission of monetary policy

Holm-Hadulla, Fédéric; Thürwächter, Claire - 2020

We study how differences in the aggregate structure of corporate debt financing affect the transmission of monetary policy. Using high-frequency financial market data to identify monetary policy shocks in a panel of euro area countries, we find that: bond finance dampens the overall response of...

Persistent link: https://www.econbiz.de/10012212853

Relationship capital and financing decisions

Geelen, Thomas; Morellec, Erwan; Rostova, Natalia - 2021

Lending relationships matter for firm financing. In a model of debt dynamics, we study how lending relationships are formed and how they impact leverage and debt maturity choices. In the model, lending relationships evolve through repeated interactions between firms and debt investors. Stronger...

Persistent link: https://www.econbiz.de/10012612803

Releveraging/Deleveraging Dynamics : Debt Maturity and Operational Leverage

Ibañez, Alfredo - 2023

We study a rich dynamic-leverage model that includes (debt-issuance covenants, a debt floor/ceiling, and specially) a fixed cost. When firms face financial but also operational leverage---the fixed cost, the firm's financial policies strongly interact---bringing forward the default time but...

Persistent link: https://www.econbiz.de/10014350309

Strategic Debt Restructuring and Asset Substitution

Giamouridis, Daniel; Prassa, Chara - 2021

This paper examines whether debt renegotiation mitigates the agency costs of asset substitution. Inspired by the studies of Mella-Barral and Perraudin (1997) and Leland (1998), we have developed an analytical continuous time model of a firm that has the option to switch to a higher risk activity...

Persistent link: https://www.econbiz.de/10013250336

Debt Maturity and Lumpy Debt

Geelen, Thomas - 2017

I develop a dynamic capital structure model in which shareholders determine a firm's leverage ratio, debt maturity, and default strategy. In my model, the firm's debt matures all at once. Therefore, after repaying the principal shareholders own all the firm's cash flows and can pick a new...

Persistent link: https://www.econbiz.de/10012970038