منابع مشابه
Pricing and Hedging Loan Prepayment Risk
Many financial products contain prepayment options. Loan contracts are often structured to provide the borrower with the option to prepay the loan at any time, or on specific dates, prior to the maturity date of the loan. These options are important aspects of these financial products. The most commonly encountered investment product with these feature is the mortgage backed security. Investmen...
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The massive losses that banks incurred with the meltdown of the subprime mortgage market have raised concerns about their ability to continue lending to corporations. We investigate these concerns. We find that firms paid higher loan spreads during the subprime crisis. Importantly, the increase in loan spreads was higher for firms that borrowed from banks that incurred larger losses. These resu...
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This paper examines the relation between the new markets for credit default swaps (CDS) and banks’ pricing of syndicated loans to US corporates. We find that changes in CDS spreads have a significantly positive coefficient and explain about 25% of subsequent monthly changes in aggregate loan spreads during 2000–2005. Moreover, when compared to traditional explanatory factors, they turn out to b...
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This paper estimates the relationship between banking market concentration and high-risk portfolio strategies at commercial banks. I use the unprecedented changes in the degree of competition in local banking markets that occurred after 1980 to estimate the impact of market competition on the risk profile of commercial bank lending. I find evidence that increasing concentration has been associa...
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Using a large sample of loans initiated by firms targeted by hedge fund activists during 19942008, we show that hedge fund activism has significant impacts on firms’ bank loan contracts. After the targeting announcement and relative to firms that are not targeted, the targeted firms pay significantly higher spreads, are more likely to be required to secure their loans, face more covenant restri...
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ژورنال
عنوان ژورنال: Economics Letters
سال: 2021
ISSN: 0165-1765
DOI: 10.1016/j.econlet.2020.109723