Corporate misreporting and bank loan contracting
This paper is the first to study the effect of financial restatement on bank loan contracting. Compared with loans initiated before restatement, loans initiated after restatement have significantly higher spreads, shorter maturities, higher likelihood of being secured, and more covenant restrictions...
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| Veröffentlicht in: | Journal of financial economics 2008-07, Vol.89 (1), p.44-61 |
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| container_title | Journal of financial economics |
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| creator | Graham, John R. Li, Si Qiu, Jiaping |
| description | This paper is the first to study the effect of financial restatement on bank loan contracting. Compared with loans initiated before restatement, loans initiated after restatement have significantly higher spreads, shorter maturities, higher likelihood of being secured, and more covenant restrictions. The increase in loan spread is significantly larger for fraudulent restating firms than other restating firms. We also find that after restatement, the number of lenders per loan declines and firms pay higher upfront and annual fees. These results are consistent with banks using tighter loan contract terms to overcome risk and information problems arising from financial restatements. |
| doi_str_mv | 10.1016/j.jfineco.2007.08.005 |
| format | Article |
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These results are consistent with banks using tighter loan contract terms to overcome risk and information problems arising from financial restatements.</description><subject>Bank loans</subject><subject>Corporate crime</subject><subject>Corporate finance</subject><subject>Corporate fraud</subject><subject>Corporate misreporting</subject><subject>Cost of debt</subject><subject>Debt management</subject><subject>Financial reporting</subject><subject>Financial restatement</subject><subject>Financial restatements</subject><subject>Financing methods</subject><subject>Fraud</subject><subject>Studies</subject><issn>0304-405X</issn><issn>1879-2774</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2008</creationdate><recordtype>article</recordtype><sourceid>X2L</sourceid><recordid>eNqFUE1r3DAUFCWFbtL-hILpoTc7T9b3KYSlSQqBXlroTajycyt3V9rI3kD-fd_ikEMvEYyehGaG0TD2kUPHgevLqZvGlDGWrgcwHdgOQL1hG26Na3tj5BnbgADZSlA_37HzeZ6AllFuw2Bb6qHUsGCzT3NFOi8p_25CHppfIf9tdiXkJpa81BBPL-_Z2zHsZvzwPC_Yj5sv37d37f2326_b6_s2ajBLy1H12AtAVE4GHcKgtBqjs71A6ewoNQYRB8053SKoKJVDjdYKNLIHIy7Y59X3UMvDEefFU76Iu13IWI6zF9pZ4ZQg4qf_iFM51kzZfC-44VJLRyS1kmItM31z9Iea9qE-eQ7-VKKf_HOJ_lSiB-upRNLdrTpqBuOLCBFXtn_0IlhH2xOBlJZGInDCgSCl19z_WfZkdbVaIbX2mLD6OSbMEYdUMS5-KOmVMP8AlnOUrA</recordid><startdate>20080701</startdate><enddate>20080701</enddate><creator>Graham, John R.</creator><creator>Li, Si</creator><creator>Qiu, Jiaping</creator><general>Elsevier B.V</general><general>Elsevier</general><general>Elsevier Sequoia S.A</general><scope>DKI</scope><scope>X2L</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>20080701</creationdate><title>Corporate misreporting and bank loan contracting</title><author>Graham, John R. ; Li, Si ; Qiu, Jiaping</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c607t-1e52e230ee594a6aad565fc9823e498f46ea3cd611498c05c459e6e883e742073</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2008</creationdate><topic>Bank loans</topic><topic>Corporate crime</topic><topic>Corporate finance</topic><topic>Corporate fraud</topic><topic>Corporate misreporting</topic><topic>Cost of debt</topic><topic>Debt management</topic><topic>Financial reporting</topic><topic>Financial restatement</topic><topic>Financial restatements</topic><topic>Financing methods</topic><topic>Fraud</topic><topic>Studies</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Graham, John R.</creatorcontrib><creatorcontrib>Li, Si</creatorcontrib><creatorcontrib>Qiu, Jiaping</creatorcontrib><collection>RePEc IDEAS</collection><collection>RePEc</collection><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Journal of financial economics</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Graham, John R.</au><au>Li, Si</au><au>Qiu, Jiaping</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Corporate misreporting and bank loan contracting</atitle><jtitle>Journal of financial economics</jtitle><date>2008-07-01</date><risdate>2008</risdate><volume>89</volume><issue>1</issue><spage>44</spage><epage>61</epage><pages>44-61</pages><issn>0304-405X</issn><eissn>1879-2774</eissn><coden>JFECDT</coden><abstract>This paper is the first to study the effect of financial restatement on bank loan contracting. Compared with loans initiated before restatement, loans initiated after restatement have significantly higher spreads, shorter maturities, higher likelihood of being secured, and more covenant restrictions. The increase in loan spread is significantly larger for fraudulent restating firms than other restating firms. We also find that after restatement, the number of lenders per loan declines and firms pay higher upfront and annual fees. These results are consistent with banks using tighter loan contract terms to overcome risk and information problems arising from financial restatements.</abstract><cop>Amsterdam</cop><pub>Elsevier B.V</pub><doi>10.1016/j.jfineco.2007.08.005</doi><tpages>18</tpages><oa>free_for_read</oa></addata></record> |
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| ispartof | Journal of financial economics, 2008-07, Vol.89 (1), p.44-61 |
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| language | eng |
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| source | RePEc; Elsevier ScienceDirect Journals Complete |
| subjects | Bank loans Corporate crime Corporate finance Corporate fraud Corporate misreporting Cost of debt Debt management Financial reporting Financial restatement Financial restatements Financing methods Fraud Studies |
| title | Corporate misreporting and bank loan contracting |
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