Debt heterogeneity and covenants
Coordination failure among owners of heterogeneous debt types increases distress costs. Covenants reduce expected distress costs by lowering the probability of liquidity shortages, increasing liquidation values, and incentivizing creditor monitoring. We predict and find that new debt contracts inclu...
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| Main Authors: | , |
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2018
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| Subjects: | |
| Online Access: | https://ink.library.smu.edu.sg/soa_research/1754 https://ink.library.smu.edu.sg/context/soa_research/article/2781/viewcontent/SSRN_id2297804.pdf |
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| Institution: | Singapore Management University |
| Language: | English |