Credit Spreads in the Market for Highly Leveraged Transaction Loans

This paper is an empirical exploration of the determinants of the required credit spreads on highly leveraged transaction (HLT) loans. The analysis uses a multi-factor spread model to estimate the movement of loan spreads relative to spreads required in the (competing) corporate bond market as well as the significance of loan-specific characteristics in determining loan spreads. The empirical estimates are based on the Loan Pricing Corporation’s database which consists of over 4000 loan transactions between 1987-1994. We find a positive HLT loan spread sensitivity to changes in spreads in the corporate bond market, but this sensitivity is significantly less than unity; indicating that the HLT loan market and high yield public debt market are not fully integrated. Furthermore, there is evidence that lenders augment, rather than substitute, loan yield spreads with additional fees for syndication, commitment and cancellation risks. In general syndicated loans have lower yield spreads than other HLT loan types

The Impact of Mega-Catastrophes on Insurers: An Exposure-Based Analysis of the U.S. Homeowners’ Insurance Market

Insurance is a key risk-sharing mechanism that protects citizens and governments from the losses caused by natural catastrophes. Given the increase in the frequency and intensity of natural catastrophes over recent years, this article analyzes the performance effects of mega-catastrophes for U.S. insurance firms using a measure of market expectations. Specifically, we analyze the share price losses of insurance firms in response to catastrophe events to ascertain whether mega-catastrophes significantly damage the performance of insurers and whether different types of mega-catastrophes have different impacts. The main message from our analysis is that the impact of mega-catastrophes on insurers has not been too damaging. While the exact impact of catastrophes depends on the nature of the event and the degree of competition within the relevant insurance market (less competition allows insurers to recoup catastrophe losses through adjustments to premiums), our overall results suggest that U.S. insurance firms can adequately manage the risks and costs of mega-catastrophes. From a public policy perspective, our results show that insurance provides a robust means of sharing catastrophe losses to help reduce the financial consequences of a catastrophe event

The behaviour of interest rate spreads prior to and after the financial crisis: evidence across OECD countries.

This study investigates the impact of the 2008 global financial crisis on interest rate spreads across OECD countries, using a number of panel methodological approaches, over the 1990–2015 period. We examine the differential impact of the global financial crisis on interest rate spreads by dividing the sample period into two, i.e. the period prior to and after the crisis. Having identified and estimated the impact of a number of drivers on interest rate spreads, the findings document that after the 2008 financial crisis, the sensitivity of spreads to its determinants turn out to be statistically significant and incorporate credit risk to a greater extent. The findings survive a number of robustness checks. The policy implications of the empirical findings are also discussed.N/

Structure and Development of Financial Institutions and Links with Trust: Cross-Country Evidence

We explore the links between trust and a broad range of financial structure and development measures. Our base sample is a cross section of 48 countries and the analysis covers the period 1980-1994. We use a new World Bank data set that provides the most comprehensive coverage of financial development and structure to this date. We find that trust is correlated with financial depth and efficiency as well as with stock market development. Results hold when using an instrumental variable approach, and they are robust to changes in specification when using a formal Sala-i-Martín sensitivity analysis

EFFECT OF BUSINESS ENVIRONMENT ON PERFORMANCE OF SELECTED SMALL AND MEDIUM ENTERPRISES (SMES) IN NORTH EAST NIGERIA

This study assessed the effect of business environment on performance of selected SMEs in North East Nigeria due to the problem of poor SMEs performance in the region. The population of the study was all SMEs in North East Nigeria from which a sample of 400 was selected respondents from the states. The study utilized multiple regression technique in analysing the data collected. The findings showed that socio-cultural environment had an insignificant positive effect on SMEs performance in the region while legal and technological environment had positive and significant effects on SMEs performance in the study area. The study therefore recommends that the SMEs should improve their strategies towards socio-cultural environment, always pay attention to technological advancements and changes and consistently adapt, and SMEs should unite into strong unions that can liaise with the government and its regulatory bodies

The Effect of Enterprise on Managerial Innovation Capacity

Business can offer an upper hand to a venture through hazardous choices that pay off improve creative items, administrations and markets in a troublesome managerial condition and by moving proactively to command a serious market. This investigation means to inspect the connection among business enterprise and managerial innovation capacity by considering subfactors, for example, creativity, proactiveness and chance taking, just as to investigate the connection between managerial innovation capacity and management performance. The examination decides the degree to which policy account and management support for little and medium-sized ventures (SMEs) assume the job of directing factors. Structure/technique/approach: Data assortment was done in 820 SMEs. To check the speculations, Covariance Structure Analysis was led utilizing EQS6b. Discoveries/results: The discoveries demonstrate that enterprise affects key arranging, innovative work, and innovation commercialisation. This examination found that managerial innovation limits effectsly affect management performance. Furthermore, this examination affirmed that when business enterprise influences managerial innovation exercises, policy financial support and management support fill in as arbitrators. Useful ramifications: Small and medium-sized undertakings should upgrade their innovation capacity and extend inventive business enterprise and policy account to carry out seriousness, endure and show constant turn of events and development in an evolving situation. Inventiveness/esteem: The investigation furnishes SME with data they can use to build their attention to interior managerial innovation exercises, which are the first wellsprings of upper hand, and help advance innovative work (RD) and authoritative management for nonstop fortification of innovation capacity. The examination gives SME data they can use to expand their familiarity with inside managerial innovation exercises, which are the first wellsprings of upper hand, and help advance RD and authoritative management for consistent support of innovation capacity. </jats:p