No abstract

Event risk covenants (ERCs) became popular as a bondholder protection measure during the height of restructuring activities in the 1980s. We investigate the empirical relation between firm characteristics and the likelihood of ERCs in bond indentures. In particular, we examine whether a firm's agency costs of debt, financial distress costs, and/or takeover potential influence its decision to include ERCs. Employing bonds with and without ERCs issued during 1986-90, we provide evidence that the likelihood a firm will include ERCs is positively related to the firm's agency costs of debt and to its potential for takeover. The results, however, do not support the financial distress costs hypothesis.

With the enactment of the Tax Equity and Fiscal Responsibility Acts of 1982 (TEFRA) a number of legislative changes were introduced in the self‐employed business person’s retirement plans known as the Keogh plans. the intention of the legislature was to liberalize and modify many of the plan rules making the plans more attractive especially to small, self‐employed business owners. The basic approach taken by Congress was to put the self‐employed retirement plans on parity with much more generous corporate plans.

The part played by several thousand savings and loan associations in the nation's economic growth is very well documented in the literature. functions as repositories of consumer savings dollars and providers of home mortgage credit have been subjects of continued interest to academicians both for pedagogical as well as research reasons and to regulatory agencies for policy directions. In recent years, however, the focus of their attention has been the comparative cost efficiency and profitability of S. & L.'s differentiated by charter (mutuals versus stock firms). The underlying rationale for such an examination is to determine the most efficient type of associations, if any, with a view to adopt policies relating to their control, conversion and future expansion. Their Purpose of the PaperThe purpose of this paper is to make a study of comparative profitability performance of all the three types of associations (federals, state mutuals and state stock firms). The data for the analysis consist of income statement and balance sheet items of the insured individual associations in the State of Ohio for the years 1968, 1969 and 1970 and were obtained from the Federal Home Loan Bank Board annual reports. interaction technique with several indicator and interaction variables.Following the industry practice, the profit model uses the ratio of return on net worth as the dependent variable and several other ratio measures as the main explanatory variables. Specifically, This cross sectional study uses a regressionwhere ROE = return on net worth, MI = interest income to mortgages, FI = fee income to operating income, 01 = other income to operating income, OE = operating expenses to assets, G = growth of new loans, FA = fixed assets to assets, SA = scheduled items to specified assets, BA = borrowings to assets, EM = assets to equity, % = branch dummy, Df = federal S&L's, D , , , = state mutuals, MIf = MI interaction with federal S & L s , MIm = MI interaction with state mutuals, and e = error term. The state stocks are default dummy.