I study the relation between internal governance and creditor governance. A deterioration in creditor governance may increase the agency costs of debt and managerial opportunism at the expense of shareholders. I exploit the introduction of credit default swaps (CDS) as a negative shock to...

I propose a theoretical framework in which lenders may suffer repayment preference shocks that encourage early and costly termination of a loan contract. Covenant-lite loans limit the circumstances in which lenders can withdraw or renegotiate credit agreements, and thus insulate lenders from...