We analyze the relation between comprehensive measures of board quality and the cost as well as the non-price terms of bank loans. We show that firms with higher quality boards and even a single (non-insider) advisory board member borrow at lower interest rates. This relation exists even after...

Financial contracts are strongly influenced by the perception that transacting parties have of each other. Hence, if contracting counterparties such as banks perceive that there is a difference in the likelihood that CEOs with conservative and liberal political orientation will discharge their...

We examine the contractual implications of lender trust in bank loan contracts. We measure a lender's trust using the average trust attitudes in the ancestral country of origin of its CEO. We find that banks with trusting CEOs charge lower loan rates. Furthermore, trusting lenders sanction...

We investigate the impact of going-concern opinions on price and non-price terms of bank loans. We argue that the existence of going-concern opinions increases both the default risk ex post and the information risk ex ante. Therefore, upon the issuance of these opinions, banks impose more...

This paper employs an unsupervised machine learning technique to construct a novel measure that captures tight multidimensional interconnections among lenders. We show both the likelihood and intensity of loan renegotiation increase with this measure. The results are robust to controlling for...

We examine the effect of corporate violations on bank loan contracting and document that borrowers with higher corporate violation penalties have higher loan costs. Higher corporate violations are also associated with more restrictive covenants and higher likelihood of collateral requirements....