behavior. A line of credit appears in the optimal long term contract similar to (DeMarzo and Fishman, 2007). The novelty of the … contract is that the credit limit varies over time, as a function of the state of volatility. Credit limit does not vary … monotonically over firms. When uncertainty increases, credit limits are reduced for highly constraint firms, because the frictions …

nor to observable firm characteristics at the initiation of the new loan, such as for example credit risk. It also does …

are stronger for borrowers with higher ESG- and credit-risk and for contracts with more sustainability performance metrics …

This paper reviews empirical evidence on the use of bank lines of credit as a source of corporate liquidity …. Traditional explanation for lines of credit is that they provide insurance against liquidity shocks, in much the same as way … hoarding cash does. However, recent empirical research suggests that access to lines of credit is contingent on the credit …

Do firms use credit line drawdowns to finance investment? Using a unique dataset of 467 COMPUSTAT firms with credit … lines, we study the purpose of drawdowns during the 2007-2009 financial crisis. Our data show that credit line drawdowns had …. Using an instrumental variable approach based on institutional features of credit line contracts, we find that a one …

We find credit line drawdowns are an important source of long-term finance for capital expenditures and acquisitions … for all but the highest rated firms. Unrated and to a lesser extent intermediate-rated firms draw down credit lines most … frequently when capital market conditions are unfavorable. Firms repay long-term credit line drawdowns relatively quickly, with 2 …