Purpose

The purpose of this study is to examine the effects of non-commercial banking institutions’ simultaneous holdings of equity and debt in the same firm (hereafter, dual holdings) on financial covenants in debt contracts.

Design/methodology/approach

By using the DealScan database, this study tests how dual holdings affect the number of financial debt covenants.

Findings

This study finds that the presence of dual holders is positively associated with the number of financial covenants in general, suggesting that the use of financial covenants is reduced when the interests between shareholders and creditors are aligned. This study also finds that dual holder participation does not reduce the number of financial covenants in leveraged loans as much as it does in investment-grade loans. Additionally, when a dual holder has a large portion of equity stakes and loan claims in a borrowing firm, the effect of dual holdings on financial covenants is more pronounced.

Originality/value

This study contributes to debt market research by showing that dual holder participation reduces the number of financial covenants in debt contracts.

中文翻译：

---

同时持有股权和债务对债务合同中财务契约的影响

目的

本研究的目的是检验非商业银行机构同时持有同一家公司的股权和债务（以下简称双重持股）对债务合同中的金融契约的影响。

设计/方法/方法

通过使用 DealScan 数据库，本研究测试双重持股如何影响金融债务契约的数量。

发现

本研究发现，双重持有人的存在总体上与财务契约的数量呈正相关，这表明当股东和债权人之间的利益一致时，财务契约的使用会减少。本研究还发现，双重持有人参与不会像投资级贷款那样减少杠杆贷款中的财务契约数量。此外，当双重持有人在借款公司中拥有大部分股权​​和贷款债权时，双重持有对财务契约的影响更为明显。

原创性/价值

本研究表明双重持有人参与减少了债务合同中的财务契约数量，从而为债务市场研究做出了贡献。