喻园管理论坛2024年第66期(总第998期)

演讲主题:Private Equity Sponsors, Law Firm Relationships, and Loan Contracts in Leveraged Buyouts

主 讲  人:Yijia Zhao（赵一甲），马萨诸塞大学波士顿分校副教授

主 持  人:李安泰 计算金融系讲师

活动时间:2024年6月28日（周五）下午16：00-17：30

活动地点:管理大楼105室

主讲人简介：

Professor Yijia Zhao is an Associate Professor of Finance at the College of Management of the University of Massachusetts Boston. Professor Zhao’s academic research has focused on financial intermediation, banking and financial institutions, securities issuance, and corporate credit markets. He has published in leading academic journals including Management Science, Journal of Financial and Quantitative Analysis, Journal of Business Ethics, Journal of Corporate Finance, and Financial Management, etc. He is also a chapter author of the Oxford Handbook of Banking (fourth edition) to be published by Oxford University Press. His research has been presented at top academic finance conferences worldwide including the Western Finance Association (WFA), European Finance Association (EFA), Financial Intermediation Research Society (FIRS), China International Conference in Finance (CICF), and at leading international research universities and regulatory agencies including University of Cambridge, University College London, University of Toronto, University of Technology Sydney, Zhejiang University, etc. Professor Zhao has taught a variety of finance courses at the undergraduate, MBA, and Ph.D. levels. He was a visiting associate professor at the Carroll College of Management of Boston College. Professor Zhao received his Ph.D. in Finance from the Darla Moore School of Business at the University of South Carolina and Bachelor of Control Science and Engineering from Huazhong University of Science and Technology.

活动简介：

We find that a private equity (PE) sponsor’s relationship with the law firm that advises banks (i.e., lender law firm) leads to weakened creditor protection in loan terms of leveraged buyouts. When the PE-Lender Law Firm relationship is stronger, loans are less likely to have a dividend payout restriction and have fewer covenants overall. This finding is robust using PE-Lender Law Firm geographic distance as an instrument for PE-Lender Law Firm relationship. Lead banks that use PE sponsors’relationship law firms are more likely to be included in the lending syndicate of next buyout deal of the sponsor. Loans with stronger PE-Lender Law Firm relationships experience weaker loan investor demand in the primary market and higher likelihood of subsequent defaults. Taken together, our paper uncovers PE sponsors’relationship with banks’legal counsel as an important channel through which PE sponsors exert bargaining power in buyout loan contract negotiations, and provides new perspective to the debate on the controversial role of PE sponsors.