Financial shocks to lenders and the composition of financial

• 成果类型: Article
• 署名作者: Christensen, Hans B.; Macciocchi, Daniele; Morris, Arthur; Nikolaev, Valeri V.
• 署名单位: University of Chicago; University of Miami; Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2021.101426
• 发表日期: 2022
• 关键词: investment opportunity set; Control rights; debt; firm; performance; covenants; CHOICE; INFORMATION; IMPACT; constraints

摘要

We provide evidence that financial shocks to lenders influence the composition of financial covenants in debt contracts. Using two distinct measures of lender-specific shocks-defaults in a lender's corporate loan portfolio that occur outside the borrower's region and industry, and non-corporate loan delinquencies-we show that lenders respond to financial shocks by increasing the number and strictness of performance-based but not of capital-based covenants in debt contracts. We examine two possible channels for this result. We find evidence consistent with lenders using stricter control rights because of concerns about capital depletion (a capital channel) and because of new in-formation about lenders' own screening ability (a learning channel). Our results indicate that lender preferences influence how accounting information is used in debt contracts. (c) 2021 Elsevier B.V. All rights reserved.