Performance Pricing in Bank Debt Contracts

By P. Asquith, Anne L. Beatty, Joseph P. Weber. 2005

426 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/39386fde7052f7ab7859bb967732d0cf6756694c

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Citations in the corpus

The Information Role of Audit Opinions in Debt Contracting (2016, neutral): “We control for the existence of performance pricing provisions because a performance pricing provision signals higher adverse selection and moral hazard costs of the borrower (Asquith et al., 2005).”
Mitigating Incentive Conflicts in Inter-Firm Relationships: Evidence from Long-Term Supply Contracts (2013, background): “particularly important for contracting purposes, and there is extensive research documenting the use of financial statement information for debt contracting (Leftwich [1983], Dichev and Skinner [2002], Asquith et al. [2005] and Li [2010]).”
The Role of Dynamic Renegotiation and Asymmetric Information in Financial Contracting (2015, positive): “Related, Asquith, Beatty, and Weber (2005) show that loan contracts often contain a number of contingencies that alter the terms of the agreement in response to changes to the credit quality of the borrower.”
Do Rating Agencies Cater? Evidence from Rating-Based Contracts (2015, neutral): “As shown in Table 1 Panel D, of all issuer-years in the FMDS sample, 69% have a performance pricing feature, which is similar to the results in Asquith et al. (2005).”
The Contracting Benefits of Accounting Conservatism to Lenders and Borrowers (2008, neutral): “Performance pricing has become a popular feature in corporate loans since the 1990s (Asquith, Beatty, and Weber, 2004).”
Performance-Sensitive Debt (2010, background): “Asquith, Beatty, and Weber (2005) provide empirical evidence that private debt contracts are more likely to include performance pricing schemes that increase interest rates in times of poor performance when agency costs associated with asymmetric information, moral hazard, or recontracting costs…”
Accounting Information in Financial Contracting: The Incomplete Contract Theory Perspective (2016, neutral): “…have on accounting choice (e.g., Skinner 1993, Sweeney, 1994, and Defond 1994), and (iv) associations between accounting-based contract contingencies, such as covenants and performance pricing provisions, and the cost of debt (e.g., Bradley and Roberts, 2004, and Asquith, Beatty, and Weber, 2005).”
Effect of Derivative Accounting Rules on Corporate Risk-Management Behavior (2009, background): “Asquith et al. 2005; Beatty and Webber 2003). Second, earnings volatility can be costly because an increase in earnings volatility leads to a higher likelihood of failing to meet or beat analysts’ 9 Hodder et al. (2006) and Barth et al.”