This article develops a continuous-time asset pricing model for valuing corporate securities in the presence of secured and unsecured debt. We consider a framework where creditors dominate the renegotiation process. We show that the unsecured creditors are incentivized to liquidate the firm...

Leveraged term loans are typically arranged by banks but distributed to institutional investors. Using novel data, we find that to elicit investors' willingness to pay, arrangers expose themselves to pipeline risk: They have to retain larger shares when investors are willing to pay less than...