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show that this feature is crucial for debt renegotiation models to explain corporate policies and debt prices. Specifically …, the model reflects empirical credit spread patterns, rationalizes the observed joint distribution of corporate events and …
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contractual restrictions that are at play for a highly levered corporate sector long before default or bankruptcy. …
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We examine the determinants of events of default clauses in syndicated loan and bond contracts, provisions that allow lenders to request the repayment of principal and to terminate lending commitments. We document significant variation in the use of default clauses and their restrictiveness...
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