We are pleased to invite you to the next BEA’s Online Research Seminars and are delighted to welcome Yuri Tserlukevich (Arizona State University). Yuri Tserlukevich is a financial economist at Arizona State University. Yuri’s research interests are in dynamic models of firm behaviour, real options, asset pricing implications of investment options, capital structure, debt structure, employee compensation. He also taught and conducted research at Hong Kong University of Science and Technology, Bocconi University in Milan, New Economic School in Moscow, and WU university in Vienna. Beginning 2014 he is a member of the Advisory Board of the National Bank of the Republic of Belarus, the Advisory Board member for the Ministry of Tax and Duties, and is an economic policy consultant for the office of the President of Belarus. He obtained his Ph.D. from University of California at Berkeley.
More about the speaker: https://wpcarey.asu.edu/people/profile/1451080
Speaker: Yuri Tserlukevich (Arizona State University)
Title: Risk Management, Agency Cost, and Lending Covenants (with Ilona Babenko and Hendrik Bessembinder)
We document the importance of loan covenants to observed hedging outcomes, by studying lending agreements and derivative positions of U.S. oil and gas producers. The emergence of fracking technology was accompanied by sharp increases in capital spending and borrowing. The contracts involved often include covenants specifying hedging policies, and more frequently for firms with higher expected costs of default. Firms with contractual hedging commitments have lower borrowing costs and perform better during the COVID-19 pandemic, even after controlling for hedging levels. The results imply that understanding firm’s hedging outcomes requires consideration of binding lending covenants employed to mitigate agency conflicts.
Date: Thursday, October 28
Time: 17:00 Vilnius, Riga, Tallinn
Meeting ID: 824 6408 4383