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SUMMARY:Upfront Fees and Prepayment Risk in Bank Loans
DTSTART:20190215T103000
DTEND:20190215T120000
DTSTAMP:20260428T082519Z
UID:b55f7b12f37da89c4c0cee6175c1fc26e44cf1ad4c570d015dacd410
CATEGORIES:Conferences - Seminars
DESCRIPTION:Karin THORBURN\, Norwegian School of Economics - NHH\nWe prese
 nt new\, large-sample evidence on commercial and industrial loans\, which 
 allow borrowers to prepay without penalty. In a simple theoretical framewo
 rk\, after receiving a private non-contractible signal\, ex-post high-qual
 ity firms strategically refinance. We show that the prepayment option may 
 trigger credit rationing\, which an upfront fee can resolve. Empirical tes
 ts show that upfront fees increase with prepayment risk\, consistent with 
 the model. Moreover\, fees are higher after an exogenous shock to prepayme
 nt risk\, instrumented with industry merger activity. Upfront fees are als
 o lower for performance-sensitive debt and credit lines\, as predicted.\n
  
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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