Recourse as Shadow Equity: Evidence from Commercial Real Estate Loans

Autor:	David Glancy, Robert Kurtzman, Lara Loewenstein, Joseph Nichols
Rok vydání:	2021
Zdroj:	Finance and Economics Discussion Series. 2021:1-32
ISSN:	2767-3898 1936-2854
Popis:	We study the role that recourse plays in the commercial real estate loan contracts of the largest U.S. banks. We find that recourse is valued by lenders and is treated as a substitute for conventional equity. At origination, recourse loans have rate spreads that are at least 20 basis points lower and loan-to-value ratios that are around 3 percentage points higher than non-recourse loans. Dynamically, recourse affects loan modification negotiations by providing additional bargaining power to the lender. Recourse loans were half as likely to receive accommodation during the COVID-19 pandemic, and the modifications that did occur entailed a relatively smaller reduction in payments.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_dedup___::742c84eddc35a8049a64f9a527fa0cc0 https://doi.org/10.17016/feds.2021.079 Zobrazit plný text záznamu Plný text ve formátu PDF