File Download
There are no files associated with this item.
Supplementary
-
Citations:
- Appears in Collections:
Conference Paper: What’s My Style? Supply-Side Determinants of Debt Covenant Inclusion
Title | What’s My Style? Supply-Side Determinants of Debt Covenant Inclusion |
---|---|
Authors | |
Issue Date | 2021 |
Citation | The 43rd European Accounting Association (EAA) Annual Congress, Virtual Conference, 26-28 May 2021 How to Cite? |
Abstract | We examine the supply-side determinants of debt covenants included in loan agreements. Controlling for borrower characteristics, we find evidence that the covenants that lead arranger banks include in new contracts persist into future contracts for at least three years. We document that this covenant style effect is smaller when borrowers have recently violated a debt covenant or when the loan issue amount is large, and it is larger when the costs of contracting are highest and when a borrower provides collateral. We also find that the covenant style effect decreases following changes in a bank’s CEO or CFO. Overall, our evidence is consistent with lenders’ covenant preferences being related to their expertise in negotiating, monitoring, and enforcing covenants. |
Description | Parallel Session FAPS.07: Financial Analysis |
Persistent Identifier | http://hdl.handle.net/10722/286518 |
DC Field | Value | Language |
---|---|---|
dc.contributor.author | Ma, ZM | - |
dc.contributor.author | Stice, DE | - |
dc.contributor.author | Williams, C | - |
dc.date.accessioned | 2020-08-31T07:04:58Z | - |
dc.date.available | 2020-08-31T07:04:58Z | - |
dc.date.issued | 2021 | - |
dc.identifier.citation | The 43rd European Accounting Association (EAA) Annual Congress, Virtual Conference, 26-28 May 2021 | - |
dc.identifier.uri | http://hdl.handle.net/10722/286518 | - |
dc.description | Parallel Session FAPS.07: Financial Analysis | - |
dc.description.abstract | We examine the supply-side determinants of debt covenants included in loan agreements. Controlling for borrower characteristics, we find evidence that the covenants that lead arranger banks include in new contracts persist into future contracts for at least three years. We document that this covenant style effect is smaller when borrowers have recently violated a debt covenant or when the loan issue amount is large, and it is larger when the costs of contracting are highest and when a borrower provides collateral. We also find that the covenant style effect decreases following changes in a bank’s CEO or CFO. Overall, our evidence is consistent with lenders’ covenant preferences being related to their expertise in negotiating, monitoring, and enforcing covenants. | - |
dc.language | eng | - |
dc.relation.ispartof | The 43rd European Accounting Association (EAA) Annual Conference | - |
dc.title | What’s My Style? Supply-Side Determinants of Debt Covenant Inclusion | - |
dc.type | Conference_Paper | - |
dc.identifier.email | Stice, DE: dstice@hku.hk | - |
dc.identifier.authority | Stice, DE=rp02572 | - |
dc.identifier.hkuros | 313719 | - |