Debt heterogeneity and covenants

• المؤلفون الرئيسيون: LOU, Yun, OTTO, Clemens A.
• التنسيق: text
• اللغة: English
• منشور في: Institutional Knowledge at Singapore Management University 2018
• الموضوعات: Debt Heterogeneity; Debt Covenants; Creditor Conflicts; Coordination Failure; Corporate Finance; Finance and Financial Management
• الوصول للمادة أونلاين: https://ink.library.smu.edu.sg/soa_research/1754; https://ink.library.smu.edu.sg/context/soa_research/article/2781/viewcontent/SSRN_id2297804.pdf

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...