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- Title
The Evolution of Debt: Covenants, the Credit Market, and Corporate Governance.
- Authors
Whitehead, Charles K.
- Abstract
The article analyzes the evolution of corporate lending and presents an overview of credit risk management. It is reported that equity and debt are alike within the traditional agency cost framing of firm and covenants act as warning trip wires that help banks managing credit risk. It is stated that the reliance of debt on monitoring and covenants may no longer be settled but changes in credit market have given cost alternatives that result in an evolution in the role of debt in corporate governance. It is concluded that the change in capital market may gradually affect capital structure and corporate governance.
- Subjects
CORPORATE debt; COVENANTS (Law); CORPORATE governance; CAPITAL market; BANKING industry; CREDIT risk; CORPORATE finance; CREDIT management; CAPITAL structure
- Publication
Journal of Corporation Law, 2009, Vol 34, Issue 3, p641
- ISSN
0360-795X
- Publication type
Article