Purpose

This study has two primary objectives. First, it analyzes the information content of confidentiality strictness in corporate loan credit agreements. Second, it examines how confidentiality strictness impacts covenant design, lending syndicate structure and loan pricing.

Design/methodology/approach

Using a sample of 6,327 loan credit agreements originated by US public firms in the period of 1996–2017, this study measures the confidentiality strictness in loan contracts using textual analyses that capture the appearance of confidentiality-related words and the length of confidentiality provision. All regressions include relevant loan characteristics, firm-specific accounting variables, industry and year fixed effects. To address the endogeneity concern, the paper uses borrowing firms' rival cash holdings and R&D expenditures to instrument for confidentiality strictness in two-staged least square regressions.

Findings

Borrowers which have higher R&D and operate in more competitive product markets have tighter confidentiality policies. Furthermore, this study reveals that confidentiality strictness is negatively associated with the imposition of financial covenants, especially performance covenants. Loan contracts for borrowers with stricter confidentiality on average have more relaxed covenant intensity, measured by the number of covenants. The study also shows that stricter confidentiality attracts finance companies, which have strong expertise in product markets of their parent firms, into the lending syndicate. However, confidentiality-conscious borrowers with higher degree of information asymmetry are subject to higher loan spreads.

Originality/value

This study provides the first examination of confidentiality policies in loan contracts and supports the idea that loan provisions are not simply made of “boilerplate” language. The results suggest that, for confidentiality-sensitive borrowers, the greater exposure to product market competition helps control managerial slack and substitute monitoring from financial markets.

中文翻译：

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贷款信贷协议的保密性

目的

这项研究有两个主要目标。首先，分析了企业贷款信用协议中保密严格性的信息内容。其次，它研究了保密严格性如何影响契约设计、贷款集团结构和贷款定价。

设计/方法/方法

本研究使用美国上市公司在 1996 年至 2017 年期间发起的 6,327 份贷款信贷协议的样本，使用文本分析来衡量贷款合同的保密严格性，这些文本分析捕捉到保密相关词语的出现和保密条款的长度。所有回归都包括相关的贷款特征、公司特定的会计变量、行业和年份固定效应。为了解决内生性问题，本文使用借款公司的竞争对手现金持有量和研发支出来衡量两阶段最小二乘回归中的保密严格性。

发现

具有较高研发和在竞争更激烈的产品市场中运营的借款人有更严格的保密政策。此外，本研究表明，保密严格性与财务契约，尤其是绩效契约的强加负相关。以契约的数量衡量，对于保密程度较高的借款人而言，贷款合同的契约强度平均更为宽松。该研究还表明，更严格的保密性会吸引在母公司产品市场拥有强大专业知识的金融公司加入贷款辛迪加。然而，信息不对称程度较高的具有保密意识的借款人面临较高的贷款利差。

原创性/价值

本研究首次检验了贷款合同中的保密政策，并支持贷款条款并非简单地由“样板”语言构成的观点。结果表明，对于对保密敏感的借款人来说，产品市场竞争的更多风险有助于控制管理松懈和替代金融市场的监控。