Renegotiation of financial contracts: Evidence from private credit agreements

• 成果类型: Article
• 署名作者: Roberts, Michael R.; Sufi, Amir
• 署名单位: University of Pennsylvania; University of Chicago
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2008.08.005
• 发表日期: 2009
• 页码: 159-184
• 关键词: Renegotiation; bargaining; Financial contracting

摘要

Using a large sample of private credit agreements between U.S. publicly traded firms and financial institutions, we show that over 90% of long-term debt contracts are renegotiated prior to their stated maturity. Renegotiations result in large changes to the amount, maturity, and pricing of the contract, occur relatively early in the life of the contract, and are rarely a consequence of distress or default. The accrual of new information concerning the credit quality, investment opportunities, and collateral of the borrower, as well as macroeconomic fluctuations in credit and equity market conditions, are the primary determinants of renegotiation and its outcomes. The terms of the initial contract (e.g., contingencies) also play an important role in renegotiations; by altering the structure of the contract in a state contingent manner, renegotiation is partially controlled by the contractual assignment of bargaining power. (C) 2009 Elsevier B.V. All rights reserved.