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SUMMARY:Investment timing\, capital structure and interest rate spread und
 er different debt-renegotiation schemes
DTSTART:20160705T120000
DTEND:20160705T130000
DTSTAMP:20260408T121924Z
UID:c671ace4b5d754e17e7b165b940b7647e323f6e91f99fac6d544cacc
CATEGORIES:Conferences - Seminars
DESCRIPTION:Aude POMMERET (City University of Hong Kong)\nThis paper revis
 its the question of how to organize debt renegotiation of financially weak
  firms. We not only consider the balance of rights between creditors and d
 ebtors but also the type of debt renegotiation scheme (debt equity swap\, 
 debt write-down) available to stakeholders. We solve analytically a model 
 of investment timing\, financial structure\, default\, and debt renegotiat
 ion under uncertainty. We then compare firms’ decisions across debt rene
 gotiation schemes and with Sundaresan and Wang (2007) type of renegotiatio
 n as well as with the situation where there is no debt-renegotiation. We s
 how that the debt renegotiation scheme available to stakeholders matters a
 s much as the balance of rights between creditors and shareholders: optima
 l leverage\, spread\, investment timing and renegotiation probability diff
 er depending on the renegotiation scheme and the magnitude of the differen
 ces between schemes is as large as that within a given scheme for differen
 t shareholder rights. In addition\, interest rate spread (on new debt) is 
 independent of creditor rights under debt write-down.
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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