The purpose of this study is to investigate the relationship between off-balance-sheet (OBS) operating leases and long-term debt by analyzing firms’ debt risk profiles measured by the constraints on firms in the financial ratios in their debt covenants.,This study determines debt risk profiles using three measures: the ex ante probability of covenant violation (Demerjian and Owens, 2016), firms in violation of debt covenants and firms close to covenant violations.,High-risk firms according to all three measures, on average, have a significantly lower level of operating leases, indicating that these firms use OBS leases as a substitute for long-term debt. Interestingly, for firms operating in industries in which leases are widely available, firms with a high probability of covenant violation have a significantly higher level of operating leases, indicating that these firms use OBS leases as a complement to long-term debt. Further analysis indicates that lease financing is less costly than debt financing for these firms.,Overall, evidence of this study indicates that firms facing financial constraints may attempt to lease more of their assets, but the availability of leasing is constrained by their debt covenant obligations and the strength of the leasing market in its industry.,This study identifies states in which risky firms may treat leases as either complements or substitutes for long-term debt, implying that the leasing decision relates to the availability of an active leasing market for a firm’s assets and the firm’s financial constraints. The findings of this study support recent research showing that debt and leases are complementary in the presence of counterparty risk providing insight into the paradoxical relationship identified in prior research between leases and long-term debt.

中文翻译：

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租赁是债务的替代还是补充？通过分析债务契约得出的见解

这项研究的目的是通过分析公司的债务风险状况来调查表外（OBS）经营租赁与长期债务之间的关系，该状况由对公司的债务契约中财务比率​​的约束来衡量。这项研究使用以下三种方法来确定债务风险状况：违反契约的事前概率（Demerjian和Owens，2016年），违反债务契约的公司和接近违反契约的公司。根据这三种衡量方法，高风险公司平均的经营租赁水平要低得多，这表明这些公司使用OBS租赁来替代长期债务。有趣的是，对于在租赁广泛的行业中经营的公司，违反契约可能性较高的公司具有较高的经营租赁水平，表明这些公司使用OBS租赁作为长期债务的补充。进一步的分析表明，对于这些公司而言，租赁融资比债务融资的成本要低。总体而言，这项研究的证据表明，面临财务约束的企业可能会尝试租赁更多的资产，但租赁的可用性受到其债务契约义务的限制。这项研究确定了风险公司可能将租赁视为长期债务的补充或替代的状态，这意味着租赁决策与一个活跃租赁市场的可用性有关。公司的资产和公司的财务约束。