Researcher: Demiroğlu, Cem
Loading...
Name Variants
Demiroğlu, Cem
Email Address
Birth Date
15 results
Search Results
Now showing 1 - 10 of 15
Publication Metadata only The use of bank lines of credit in corporate liquidity management: a review of empirical evidence(Elsevier, 2011) James, Christopher; Department of Business Administration; Demiroğlu, Cem; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 18073This paper reviews empirical evidence on the use of bank lines of credit as a source of corporate liquidity. Traditional explanation for lines of credit is that they provide insurance against liquidity shocks, in much the same as way hoarding cash does. However, recent empirical research suggests that access to lines of credit is contingent on the credit quality of the borrower as well as the financial condition of the lender. These findings suggest that lines of credit are an imperfect substitute for cash as a source of corporate liquidity. (C) 2010 Published by Elsevier B.V.Publication Metadata only How important is having skin in the game? Originator-sponsor affiliation and losses on mortgage-backed securities(Oxford Univ Press Inc, 2012) James, Christopher; Department of Business Administration; Demiroğlu, Cem; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 18073This article examines the relationship between a mortgage originator's affiliation with the sponsor of a securitization or the servicer of the securitized loans and the default rate on the securitized mortgages. We find that default rates are significantly lower for securitizations in which the originator is affiliated with the sponsor or servicer. Consistent with investors expecting performance to vary with affiliation, we find that the initial yields on mortgage-backed securities (MBS) are lower and the percentage of AAA-rated securities issued against the securitized pool of loans is higher when the originator is affiliated with either the sponsor or servicer.Publication Metadata only Bank lending standards and access to lines of credit(Wiley, 2012) James, Christopher; Kizilaslan, Atay; Department of Business Administration; Demiroğlu, Cem; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 18073This paper examines how changes in bank lending standards are related to the availability of bank lines of credit for private and comparable public firms. Overall, we find that access to lines of credit is more contingent on bank lending standards for private than for public firms. The impact of bank lending standards is however asymmetric: while private firms are less likely than public firms to gain access to new lines when credit market conditions are tight, we find no difference between public and private firms in terms of their use or retention of pre-existing lines. We also find that private firms without lines of credit use more trade credit when bank lending standards are tight, which is suggestive of a supply effect. Overall, the evidence suggests that credit crunches are likely to have a disproportionate impact on private firms. However, pre-existing banking relationships appear to mitigate the impact of these contractions on private firms.Publication Metadata only The information content of bank loan covenants(Oxford Univ Press Inc, 2010) James, Christopher; Department of Business Administration; Demiroğlu, Cem; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 18073This article examines the determinants of financial covenant thresholds in bank loan agreements and information conveyed through the selection of tight financial covenants. We find that riskier firms and firms with fewer investment opportunities select tighter financial covenants. We also find that selection of tight covenants is associated with improvements in the covenant variable and declines in investment spending and net debt issuance. We observe these changes also for borrowers that do not breach their covenants, suggesting that they are not simply the result of creditor influence conditional on a technical default. Furthermore, we find that violations of tightly set covenants have significantly less of an impact on the borrower's investment spending and net debt issuance than violations of loosely set covenants. Overall, our results suggest that the selection of tight covenants conveys information concerning future changes in covenant variables, investment and financial policies, and the outcome of covenant violations.Publication Metadata only The first analyst coverage of neglected stocks(Wiley-Blackwell, 2010) Ryngaert, Michael; Department of Business Administration; Demiroğlu, Cem; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 18073We examine the first analyst coverage of 549 "neglected" stocks that publicly traded at least one year without research coverage. The stocks experience a +4.86% abnormal return at initiation announcement. Positive returns are driven by positive coverage and not the mere introduction of coverage. Initiations from investment banks elicit lower announcement returns if the bank had a prior business relationship with the covered firm. Research firms paid by the covered company to provide coverage elicit announcement returns that are not significantly different from other analysts. Announcement returns are also influenced by liquidity increases and factors consistent with downward-sloping demand curves.Publication Metadata only Do market prices improve the accuracy of court valuations in chapter 11?(Wiley, 2022) Franks, Julian; Lewis, Ryan; Department of Business Administration; Demiroğlu, Cem; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 18073The average difference between the court value and postemergence market value of newly issued stocks in Chapter 11 reorganizations exceeds 50%. We show that public dissemination of transactions in defaulted bonds reduces this difference by 23% and largely eliminates interclaimant wealth transfers. The effects of dissemination are only significant when the bonds are sufficiently traded around the court valuation date and when they receive significant amounts of postemergence equity, indicating that the bond's value is sensitive to the size and allocation of the pie. These findings imply that security prices have real effects: they improve the valuations of bankruptcy participants.Publication Metadata only Indicators of collateral misreporting(Informs, 2018) James, Christopher; Department of Business Administration; Demiroğlu, Cem; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 18073Automated valuation models (AVMs) are widely used in the valuation of pools of residential mortgages. In this paper, we provide evidence that high pricing errors in human and automated valuation models as well as rejection of loans with relatively low appraisals may generate the appearance of appraisal bias even when the original appraisals are unbiased. We also present evidence that the estimated frequency of appraisal overstatement is quite sensitive to assumptions about loan denial rates due to low appraisals as well as the size of and the correlation between AVM and original appraisal pricing errors.Publication Metadata only The dodd-frank act and the regulation of risk retention in mortgage-backed securities(Mit Press, 2014) James, Christopher M.; Department of Business Administration; Demiroğlu, Cem; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 18073N/APublication Metadata only Why are commercial loan rates so sticky? The effect of private information on loan spreads(2022) James, Christopher; Velioğlu, Güner; Department of Business Administration; Demiroğlu, Cem; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 18073Past studies find that commercial loan spreads are “sticky” in the sense that they do not fully respond to changes in open market rates or observable firm credit risk characteristics. In this paper, we provide evidence that the appearance of stickiness arises, in part, because the intensity of bank screening varies inversely with changes in both observable firm credit risk characteristics and credit market conditions. Our analysis demonstrates that stickiness in loan spreads does not necessarily indicate loan mispricing or misallocation of credit.Publication Metadata only Bank loans and troubled debt restructurings(Elsevier Science Sa, 2015) James, Christopher; Department of Business Administration; Demiroğlu, Cem; Faculty Member; Department of Business Administration; College of Administrative Sciences and Economics; 18073This paper examines the relation between the number and type of lenders that participate in corporate loan facilities and the nature of troubled debt restructurings. We find that loans from traditional bank lenders are significantly easier to restructure out of court than loans from institutional lenders. We also find that the existence of a past banking relationship between the borrower and the lead arranger of a syndicated loan adversely affects the ease of restructuring. Finally, we find that reliance on loans that are held in part by collateralized loan obligations (CLOs) is positively related to the likelihood of a prepackaged bankruptcy, consistent with greater holdout problems when loans are held by CLOs. Overall, our findings suggest that the role of banks in the restructuring process is quite different when bank loans are diffusely held or securitized. (C) 2015 Elsevier B.V. All rights reserved.