Performance pricing in bank debt contracts
Performance pricing links bank debt interest rate spreads to a borrower's performance via two options. Interest-decreasing performance pricing reduces spreads if credit quality improves. It is more common when prepayment is more likely or costly and when adverse selection costs are higher, and...
Gespeichert in:
| Veröffentlicht in: | Journal of accounting & economics 2005-12, Vol.40 (1), p.101-128 |
|---|---|
| Hauptverfasser: | , , |
| Format: | Artikel |
| Sprache: | eng |
| Schlagworte: | |
| Online-Zugang: | Volltext |
| Tags: |
Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
|
| container_end_page | 128 |
|---|---|
| container_issue | 1 |
| container_start_page | 101 |
| container_title | Journal of accounting & economics |
| container_volume | 40 |
| creator | Asquith, Paul Beatty, Anne Weber, Joseph |
| description | Performance pricing links bank debt interest rate spreads to a borrower's performance via two options. Interest-decreasing performance pricing reduces spreads if credit quality improves. It is more common when prepayment is more likely or costly and when adverse selection costs are higher, and is less common when multiple performance measures better predict credit quality. Interest-increasing performance pricing increases spreads if credit quality deteriorates. It is more common when lenders reduce interest rates to add this provision, when downgrades are more likely, and when moral hazard costs are higher. We find lower spreads for contracts with interest increasing performance pricing. |
| doi_str_mv | 10.1016/j.jacceco.2004.09.005 |
| format | Article |
| fullrecord | <record><control><sourceid>proquest_cross</sourceid><recordid>TN_cdi_proquest_miscellaneous_37742815</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><els_id>S0165410105000583</els_id><sourcerecordid>37742815</sourcerecordid><originalsourceid>FETCH-LOGICAL-c498t-a529355fe9b06bb6915e6c0d00102781882edc5ea5d1903e2ba18141aee2a9273</originalsourceid><addsrcrecordid>eNqFkEFr3DAQhUVoodukP6FgcsihYGdGttbSKZSQJoGF5NCeB1meTeXu2hvJG8i_7ywbcuilh5nR4XuPp6fUV4QKAZeXQzX4EDhMlQZoKnAVgDlRC7StK9FZ-KAWwpmyEfyT-pzzAAJqCwv17ZHTekpbPwYudimGOD4VcSw6P_4peu7mIkzjnHyY85n6uPabzF_e7qn69ePm5_VduXq4vb_-vipD4-xceqNdbcyaXQfLrls6NLwM0AMg6NaitZr7YNibHh3UrDuPFhv0zNo73dan6uLou0vT857zTNuYA282fuRpn6luW8mORsDzf8Bh2qdRspHGGozBFgQyRyikKefEa5Jfbn16JQQ61EcDvdVHh_oIHEl9olsddYl3HN5FzDx4YUd6odo3IOtVRpRGTpRBqmXvDi9AQm3p97wVu6ujHUtzL5ET5RBZSu9j4jBTP8X_BPoLXWGSYQ</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>213055170</pqid></control><display><type>article</type><title>Performance pricing in bank debt contracts</title><source>RePEc</source><source>ScienceDirect Journals (5 years ago - present)</source><creator>Asquith, Paul ; Beatty, Anne ; Weber, Joseph</creator><creatorcontrib>Asquith, Paul ; Beatty, Anne ; Weber, Joseph</creatorcontrib><description>Performance pricing links bank debt interest rate spreads to a borrower's performance via two options. Interest-decreasing performance pricing reduces spreads if credit quality improves. It is more common when prepayment is more likely or costly and when adverse selection costs are higher, and is less common when multiple performance measures better predict credit quality. Interest-increasing performance pricing increases spreads if credit quality deteriorates. It is more common when lenders reduce interest rates to add this provision, when downgrades are more likely, and when moral hazard costs are higher. We find lower spreads for contracts with interest increasing performance pricing.</description><identifier>ISSN: 0165-4101</identifier><identifier>EISSN: 1879-1980</identifier><identifier>DOI: 10.1016/j.jacceco.2004.09.005</identifier><identifier>CODEN: JAECDS</identifier><language>eng</language><publisher>Amsterdam: Elsevier B.V</publisher><subject>Accounting ; Accounting choice ; Agency ; Agency theory ; Banking industry ; Banks ; Contracting ; Contracts ; Debt ; Debt contracting ; Interest rates ; Positive accounting ; Pricing ; Spread ; Studies</subject><ispartof>Journal of accounting & economics, 2005-12, Vol.40 (1), p.101-128</ispartof><rights>2005 Elsevier B.V.</rights><rights>Copyright Elsevier Sequoia S.A. Dec 2005</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c498t-a529355fe9b06bb6915e6c0d00102781882edc5ea5d1903e2ba18141aee2a9273</citedby><cites>FETCH-LOGICAL-c498t-a529355fe9b06bb6915e6c0d00102781882edc5ea5d1903e2ba18141aee2a9273</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktohtml>$$Uhttps://dx.doi.org/10.1016/j.jacceco.2004.09.005$$EHTML$$P50$$Gelsevier$$H</linktohtml><link.rule.ids>314,780,784,3548,4006,27923,27924,45994</link.rule.ids><backlink>$$Uhttp://econpapers.repec.org/article/eeejaecon/v_3a40_3ay_3a2005_3ai_3a1-3_3ap_3a101-128.htm$$DView record in RePEc$$Hfree_for_read</backlink></links><search><creatorcontrib>Asquith, Paul</creatorcontrib><creatorcontrib>Beatty, Anne</creatorcontrib><creatorcontrib>Weber, Joseph</creatorcontrib><title>Performance pricing in bank debt contracts</title><title>Journal of accounting & economics</title><description>Performance pricing links bank debt interest rate spreads to a borrower's performance via two options. Interest-decreasing performance pricing reduces spreads if credit quality improves. It is more common when prepayment is more likely or costly and when adverse selection costs are higher, and is less common when multiple performance measures better predict credit quality. Interest-increasing performance pricing increases spreads if credit quality deteriorates. It is more common when lenders reduce interest rates to add this provision, when downgrades are more likely, and when moral hazard costs are higher. We find lower spreads for contracts with interest increasing performance pricing.</description><subject>Accounting</subject><subject>Accounting choice</subject><subject>Agency</subject><subject>Agency theory</subject><subject>Banking industry</subject><subject>Banks</subject><subject>Contracting</subject><subject>Contracts</subject><subject>Debt</subject><subject>Debt contracting</subject><subject>Interest rates</subject><subject>Positive accounting</subject><subject>Pricing</subject><subject>Spread</subject><subject>Studies</subject><issn>0165-4101</issn><issn>1879-1980</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2005</creationdate><recordtype>article</recordtype><sourceid>X2L</sourceid><recordid>eNqFkEFr3DAQhUVoodukP6FgcsihYGdGttbSKZSQJoGF5NCeB1meTeXu2hvJG8i_7ywbcuilh5nR4XuPp6fUV4QKAZeXQzX4EDhMlQZoKnAVgDlRC7StK9FZ-KAWwpmyEfyT-pzzAAJqCwv17ZHTekpbPwYudimGOD4VcSw6P_4peu7mIkzjnHyY85n6uPabzF_e7qn69ePm5_VduXq4vb_-vipD4-xceqNdbcyaXQfLrls6NLwM0AMg6NaitZr7YNibHh3UrDuPFhv0zNo73dan6uLou0vT857zTNuYA282fuRpn6luW8mORsDzf8Bh2qdRspHGGozBFgQyRyikKefEa5Jfbn16JQQ61EcDvdVHh_oIHEl9olsddYl3HN5FzDx4YUd6odo3IOtVRpRGTpRBqmXvDi9AQm3p97wVu6ujHUtzL5ET5RBZSu9j4jBTP8X_BPoLXWGSYQ</recordid><startdate>20051201</startdate><enddate>20051201</enddate><creator>Asquith, Paul</creator><creator>Beatty, Anne</creator><creator>Weber, Joseph</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>20051201</creationdate><title>Performance pricing in bank debt contracts</title><author>Asquith, Paul ; Beatty, Anne ; Weber, Joseph</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c498t-a529355fe9b06bb6915e6c0d00102781882edc5ea5d1903e2ba18141aee2a9273</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2005</creationdate><topic>Accounting</topic><topic>Accounting choice</topic><topic>Agency</topic><topic>Agency theory</topic><topic>Banking industry</topic><topic>Banks</topic><topic>Contracting</topic><topic>Contracts</topic><topic>Debt</topic><topic>Debt contracting</topic><topic>Interest rates</topic><topic>Positive accounting</topic><topic>Pricing</topic><topic>Spread</topic><topic>Studies</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Asquith, Paul</creatorcontrib><creatorcontrib>Beatty, Anne</creatorcontrib><creatorcontrib>Weber, Joseph</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 accounting & economics</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Asquith, Paul</au><au>Beatty, Anne</au><au>Weber, Joseph</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Performance pricing in bank debt contracts</atitle><jtitle>Journal of accounting & economics</jtitle><date>2005-12-01</date><risdate>2005</risdate><volume>40</volume><issue>1</issue><spage>101</spage><epage>128</epage><pages>101-128</pages><issn>0165-4101</issn><eissn>1879-1980</eissn><coden>JAECDS</coden><abstract>Performance pricing links bank debt interest rate spreads to a borrower's performance via two options. Interest-decreasing performance pricing reduces spreads if credit quality improves. It is more common when prepayment is more likely or costly and when adverse selection costs are higher, and is less common when multiple performance measures better predict credit quality. Interest-increasing performance pricing increases spreads if credit quality deteriorates. It is more common when lenders reduce interest rates to add this provision, when downgrades are more likely, and when moral hazard costs are higher. We find lower spreads for contracts with interest increasing performance pricing.</abstract><cop>Amsterdam</cop><pub>Elsevier B.V</pub><doi>10.1016/j.jacceco.2004.09.005</doi><tpages>28</tpages></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 0165-4101 |
| ispartof | Journal of accounting & economics, 2005-12, Vol.40 (1), p.101-128 |
| issn | 0165-4101 1879-1980 |
| language | eng |
| recordid | cdi_proquest_miscellaneous_37742815 |
| source | RePEc; ScienceDirect Journals (5 years ago - present) |
| subjects | Accounting Accounting choice Agency Agency theory Banking industry Banks Contracting Contracts Debt Debt contracting Interest rates Positive accounting Pricing Spread Studies |
| title | Performance pricing in bank debt contracts |
| url | https://sfx.bib-bvb.de/sfx_tum?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2025-01-12T02%3A52%3A19IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-proquest_cross&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=Performance%20pricing%20in%20bank%20debt%20contracts&rft.jtitle=Journal%20of%20accounting%20&%20economics&rft.au=Asquith,%20Paul&rft.date=2005-12-01&rft.volume=40&rft.issue=1&rft.spage=101&rft.epage=128&rft.pages=101-128&rft.issn=0165-4101&rft.eissn=1879-1980&rft.coden=JAECDS&rft_id=info:doi/10.1016/j.jacceco.2004.09.005&rft_dat=%3Cproquest_cross%3E37742815%3C/proquest_cross%3E%3Curl%3E%3C/url%3E&disable_directlink=true&sfx.directlink=off&sfx.report_link=0&rft_id=info:oai/&rft_pqid=213055170&rft_id=info:pmid/&rft_els_id=S0165410105000583&rfr_iscdi=true |