Monitoring And Structure of Debt Contracts  

Oleh:

Park, Cheol

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 55 no. 5 (2000), page 2157-2196.
Topik: contract; theory; corporate debt; contracts; debt financing; mathematical models; lenders
Fulltext: p 2157.pdf (215.65KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88.3 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

This paper presents a theory of optimal debt structure when the moral hazard problem is severe. The main idea is that the optimal debt contract delegates monitoring to a single seniorlender and that seniority allows the monitoring senior lender to appropriate the full return from his monitoring activities. The theory explains : i. why debt contracts are prioritized ii. why short - term debt is senior to long - term debt, and iii. why financial intermediaries ussully hold short - term senior debt whereas long - term junior debt is widely held. Another implication of the theory is that covenant and maturity structures will be set to conform to the seniority structure.

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