Corporate misreporting and bank loan contracting
By: John R. Graham, Si Li, Jiaping Qiu.
Contributors: Li, Si, 1975-; Qiu, Jiaping, 1973-; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 13708; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 13708.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
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 the view that banks use tighter loan contract terms to overcome risk and information problems arising from financial restatements"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/6/2008.

Includes bibliographical references.

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