Bank Debt and Corporate Governance

Ivashina, Victoria; Nair, Vinay B.; Saunders, Anthony; Massoud, Nadia; Stover, Roger D.

doi:10.1093/rfs/hhn063

Cited by 104 publications

(60 citation statements)

References 23 publications

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“…The model showed 94% and 97% accuracy for classifying bankrupt and non-bankrupt companies, respectively, one year ahead of bankruptcy, and the literature later found the wide use of the Altman Z-score in many bankruptcy and financial distress studies (for example, Hofer et al, 2005;Ivashina et al, 2008;Katz et al, 1985). MacKie-Mason (1990) also adopted the Altman Z-score equation for a study, but modified the original equation by excluding one factor (i.e., market value of equity, scaled by book value of total liabilities) because the factor systematically relates to one main variable in the model (i.e., leverage ratio).…”

Section: General Financial Distress Literaturementioning

confidence: 99%

Moderating effect of capital intensity on the relationship between leverage and financial distress in the U.S. restaurant industry

Lee

Koh

Kang

2011

International Journal of Hospitality Management

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Section: General Financial Distress Literaturementioning

confidence: 99%

Moderating effect of capital intensity on the relationship between leverage and financial distress in the U.S. restaurant industry

Lee

Koh

Kang

2011

International Journal of Hospitality Management

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“…In this paper, we classify firms with accounting standards codes 02, 06, and 23 as IFRS adopters. 15 Other papers using the Loan Pricing Corporation's DealScan database include Strahan (1999), Bae andGoyal (2009), Bharath et al (2008), Asquith et al (2005), Ivashina et al (2008), and Kim et al (2011). 16 For instance, a deal can comprise a line of credit facility and a term loan.…”

Section: Empirical Modelmentioning

confidence: 99%

The voluntary adoption of International Financial Reporting Standards and loan contracting around the world

2011

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Using a sample of non-U.S. borrowers from 40 countries during 1997 through 2005, this paper investigates the effect of the voluntary adoption of International Financial Reporting Standards (IFRS) on price and nonprice terms of loan contracts and loan ownership structure in the international loan market. Our results reveal the following. First, banks charge lower loan rates to IFRS adopters than to non-adopters. The difference in loan rates in excess of a benchmark rate between the two groups is about 20 basis points for all loans and nearly 31 basis points for London Interbank Offered Rate (LIBOR)-based loans. Second, banks impose more favorable nonprice terms on IFRS adopters, particularly less restrictive covenants. We also provide evidence suggesting that banks are more willing to extend credit to IFRS adopters through larger loans and longer maturities. Finally, IFRS adopters attract significantly more foreign lenders participating in loan syndicates than nonadopters.Keywords International Financial Reporting Standards (IFRS) Á Loan spread Á Collateral Á Debt covenant Á Syndicate structure Á Foreign banks JEL classification G3 Á G21 Á G34 Á M41 Á N20

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“…In the simultaneous equations system, we assume AIDS is affected by maturity and collateral, and maturity and collateral influence each other but are not affected by AIDS. In light of the decision procedures of loan contracts: non-price terms are determined before price terms (Ivashina, Nair, Saunders, Massoud, and Stover, 2009). To satisfy the order condition, we use instrument variables (IVs) proposed in (Bharath et al, 2011).…”

Section: Appendix III Simultaneous Equation Models Estimationmentioning

confidence: 99%