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The Importance of Originator-Servicer Affiliation in Loan Renegotiation

Conklin, James - 2019

This paper presents evidence that affiliation between the mortgage servicer and the originator provides a mechanism to reduce information frictions inherent in debt renegotiation. We find that originator-servicer affiliation increases the likelihood of modification by 10%-23T using a large...

Persistent link: https://www.econbiz.de/10012863949

Discussion of 'Borrower Private Information Covenants and Loan Contract Monitoring'

Nikolaev, Valeri V. - 2017

Carrizosa and Ryan (2017) explore the use of private information covenants, which contractually oblige borrowers to provide their lenders with private information: projected or intra-quarter financial statements. The authors offer evidence that creditors acquire private information about...

Persistent link: https://www.econbiz.de/10012951596

Screening as a Unified Theory of Delinquency, Renegotiation, and Bankruptcy

Kovrijnykh, Natalia - 2015

We propose a parsimonious model with adverse selection where delinquency, renegotiation, and bankruptcy all occur in equilibrium as a result of a simple screening mechanism. A borrower has private information about her cost of bankruptcy, and a lender may use random contracts to screen different...

Persistent link: https://www.econbiz.de/10013030850

Syndicated Loans : The Role of Covenants in Mitigating Lender Disagreements

Dass, Nishant - 2015

We study the role of covenants in syndicated bank loans. We argue that, in addition to being a device for monitoring the borrower, covenants can help mitigate conflicts of interest between the lead-arranger and participating banks in the syndicate. Such disagreements can arise when, for...

Persistent link: https://www.econbiz.de/10013038187

Loan Sales Under Asymmetric Information

Vargas Martínez, Mónica - 2010

Loans are illiquid assets that can be sold in a secondary market even that buyers have no certainty about their quality. I study a model in which a lender has access to new investment opportunities when all her assets are illiquid. To raise funds, the lender may either borrow using her assets as...

Persistent link: https://www.econbiz.de/10013147070

The Role of Dynamic Renegotiation and Asymmetric Information in Financial Contracting

Roberts, Michael R. - 2014

the financial health of the contracting parties and uncertainty regarding the borrowers' credit quality. The relative …

Persistent link: https://www.econbiz.de/10013068840

Credit information in universal banking : a clinical study

Burghof, Hans-Peter; Henschel, Claudia - 1998

firms. The study is based on the credit files of the respective firms. If no problems occur in these lending relationships …, the traditional view of credit assessment as observation of the quality of a borrower's investment programme needs to be …

Persistent link: https://www.econbiz.de/10009768853

Adverse selection and credit certificates : evidence from a P2P platform

Hu, Maggie Rong; Li, Xiaoyang; Shi, Yang - 2019

to obtain various kinds of credit certificates. As P2P markets continue to develop, it is plausible that certification … surprisingly, loans with more credit certificates experience a higher rate of delinquency and default. However, lenders remain … reduced investment inefficiency. Overall, we document a setting where credit certificates fail to serve as an accurate signal …

Persistent link: https://www.econbiz.de/10011993929

Uncertainty and the cost of bank vs. bond finance

Grimme, Christian - 2019

How does uncertainty affect the costs of raising finance in the bond market and via bank loans? Empirically, this paper finds that heightened uncertainty is accompanied by an increase in corporate bond yields and a decrease in bank lending rates. This finding can be explained with a model that...

Persistent link: https://www.econbiz.de/10011958806

Borrower Private Information Covenants and Loan Contract Monitoring

Carrizosa, Richard - 2017

Prior research finds that commercial borrowers provide lenders with private information. This research generally does not identify how lenders obtain such information or the types of information obtained, however, limiting the directness and interpretability of tests of lenders' use of the...

Persistent link: https://www.econbiz.de/10012971965