Debt Financing and Risk Management

UNIVERSITY OF TECHNOLOGY SYDNEY
Finance Department
Research Seminars in Finance

Yuri Tserlukevich

Topic: Debt Financing and Risk Management

Speaker: Yuri Tserlukevich, Arizona State University

Abstract: We study detailed data on bank lending agreements and derivative positions of U.S. oil and gas producers. Using the emergence of fracking technology as an exogenous shock to firms' financing needs, we document sharp increases in debt financing accompanied by increased hedging activity. Loan contracts often include covenants that commit borrowers to specific hedging policies, with the majority specifying an explicit minimum. Firms with such contractual hedging commitments have lower borrowing costs and perform better during the COVID-19 pandemic. The results imply that firms' observed hedging decisions reflect in part binding creditor commitments that effectively mitigate potential agency conflicts.

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Moderator: Kristoffer Glover, University of Technology Sydney

Date: Wednesday 31 March 2021
Time: 9-10 am (Australian Eastern Daylight Time)
Venue: This is an online Zoom webinar.

After registering, you will receive a confirmation email containing information on how to join the meeting, including an access link.

Seminar protocols:

  • The webinar will run for 45 minutes, followed by a 15-minute Q&A session.
  • There will be a moderator for each seminar event, who will facilitate communication and resolve any technical issues.
  • Participants can use the chat facility or raise their hands to ask questions during the presentation. The moderator will then alert the speaker at the appropriate time and either ask the questions raised or unmute the participant so they can ask the question directly to the presenter.

Coordinator: Harry Scheule

Enquiries: Duncan Ford

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UTS acknowledges the Gadigal people of the Eora Nation, the Boorooberongal people of the Dharug Nation, the Bidiagal people and the Gamaygal people, upon whose ancestral lands our university stands. We would also like to pay respect to the Elders both past and present, acknowledging them as the traditional custodians of knowledge for these lands.