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- Title
Debt Renegotiation and the Design of Financial Contracts.
- Authors
Godlewski, Christophe J.
- Abstract
This study examines the design of financial contracts after renegotiations. It focuses on the degree of renegotiation as measured by the number of amendments to the contract. I find that the design of renegotiated financial contracts is not homogenous, although the most frequent amendments are to the loan's amount and maturity. I show that the number of amendments increases with longer maturities. Collateral and bank reputation have the opposite effect. Creditors friendly environments with fewer renegotiation frictions increase the number of amendments. Overall, contractual, organizational, and legal features have a significant influence on the design of financial contracts after renegotiation.
- Subjects
BANK loans; RENEGOTIATION; CONTRACTS; DEBTOR &; creditor; DEBT relief; LOAN agreements
- Publication
Journal of Financial Services Research, 2019, Vol 55, Issue 2/3, p191
- ISSN
0920-8550
- Publication type
Article
- DOI
10.1007/s10693-019-00311-x