The aim of the paper is to assess the efficiency of public aid in form of a guarantee, given the EC State aid law. A State aid element valuation method for guarantee schemes, which highlights the effect of State aid on credit risk mitigation and takes into account the criteria for EC...

Covenants are particular clauses in debt contracts of firms that restrict business policy, giving creditors the possibility of putting precise actions into force - normally early repayment - when the covenants are violated. We refer to the Agency Theory of Covenant (ATC), which assumes that as...