TY  - BOOK
AU  - Saavedra,Daniel
TI  - Syndicate size and the choice of covenants in debt contracts
KW  - Contabilidad
KW  - Publicaciones seriadas
KW  - Riesgo financiero
KW  - Instituciones financieras
KW  - Relaciones industriales
KW  - Sindicatos
N2  - I investigate whether and how syndicate size influences the type of covenants used in debt contracts. Prior theory and evidence suggest renegotiation considerations from coordination difficulties in large syndicates and intertemporal transfers due to relationship lending in small syndicates are factors in the design of covenants. I find that for large syndicates, borrowers and lenders avoid the use of flexibility-reducing covenants that are more likely to impact negatively on value-enhancing corporate policies in good states of the world. This effect becomes stronger when the borrower has fewer outside financing options. Additionally, I find contracts with large syndicates are more likely to have more covenant slack, include performance pricing provisions, have tailored capital expenditure covenants, and principally rely on covenants that are directly linked to the current performance of the borrower. Collectively, these results imply that syndicate size and related renegotiation considerations affect how accounting information is used in debt contracts
ER  -