Marc Arnold

Title

Prof. Dr.

Last Name

Arnold

First name

Marc

Email

marc.arnold@unisg.ch

Phone

+41 71 224 7413

Now showing 1 - 1 of 1

Creditor Control Rights and the Pricing of Private Loans

( 2022-01-07)
Arnold, Marc
;
Kollmann, Nicola
;
Tengulov, Angel

This paper investigates the influence of creditor control rights on the pricing and design of corporate loans. We construct a novel dataset, which combines individual borrower, lender, and loan characteristics with covenant violation data. The dataset contains observations, in which borrowers are in violation only with some of their multiple creditors. This data structure allows us to address the endogeneity concerns of the standard quasi-regression discontinuity design that uses covenant violations to identify shifts in creditor control rights. We find that creditors exploit their control rights to overprice new loans and tighten the loan conditions.

Type: conference poster

URI: https://www.alexandria.unisg.ch/handle/20.500.14171/109086