Derivatives-hedging, risk allocation and the cost of debt: Evidence from bank holding companies

2017 ◽  
Vol 65 ◽  
pp. 114-127 ◽  
Author(s):  
Saiying Deng ◽  
Elyas Elyasiani ◽  
Connie X. Mao
Keyword(s):  
Cost Of Debt ◽  
Risk Allocation ◽  
Bank Holding Companies ◽  
Holding Companies ◽  
The Cost

Diversification and the cost of debt of bank holding companies

2007 ◽  
Vol 31 (8) ◽  
pp. 2453-2473 ◽  
Author(s):  
Saiying (Esther) Deng ◽  
Elyas Elyasiani ◽  
Connie X. Mao
Keyword(s):  
Cost Of Debt ◽  
Bank Holding Companies ◽  
Holding Companies ◽  
The Cost

Turning Around Distressed Project Finance Assets in India: What More Needs to Be Done?

2018 ◽  
Keyword(s):  
Cash Flows ◽  
Project Finance ◽  
Cost Of Debt ◽  
Risk Allocation ◽  
Debt Overhang ◽  
Balance Sheets ◽  
Infrastructure Project ◽  
Bankruptcy Code ◽  
The Cost ◽  
Future Cash Flows

With the Insolvency and Bankruptcy Code firmly in place, India’s distressed project finance assets are turning out to be attractive to institutional investors. Project finance assets need asset-and deal-specific financing solutions in order to achieve successful turnarounds. The turnaround solution must ensure optimum risk allocation and mitigation leading to the buildup of future cash flows. This will, in turn, lead to deleveraging of stressed balance sheets. The authors present a conceptual model and argue that even now the political and regulatory risks for infrastructure project loans in India have not been completely mitigated. This has resulted in a situation of a debt overhang, wherein even economically viable projects may not attract fresh funding. To address this, the article suggests the possible use of priority funding structures, where existing lenders cede charge of the assets in favor of a new lender as a way to reduce the cost of debt and unlock shareholder value. This solution will also ensure that the restructuring package is properly priced (from the project finance lender’s perspective), resulting in the efficiency and viability of the restructured asset.

Strategic Cost Shifting and State Tax Minimization

2017 ◽  
Vol 30 (1) ◽  
pp. 55-72
Author(s):  
Curtis M. Hall ◽  
Stephen J. Lusch
Keyword(s):  
Cost Allocation ◽  
Unique Contribution ◽  
Bank Holding Companies ◽  
Cost Shifting ◽  
Holding Companies ◽  
Tax Reduction ◽  
Tax Management ◽  
State Tax ◽  
Alternative Type ◽  
The Cost

ABSTRACT In this study, we predict and find that multistate bank holding companies strategically allocate costs among their subsidiary banks to minimize tax. In particular, we find that high tax subsidiary banks report higher costs than low tax subsidiary banks within the same bank holding company. Additional tests provide evidence of cost shifting rather than operational differences among states. In particular, we find that high tax subsidiary banks of multistate bank holding companies report higher costs than single-state banks in the same high tax state. Our study provides a unique contribution to the cost allocation and tax management literature by directly linking tax reduction incentives to cost allocation and documenting an alternative type of state tax-minimization strategy in the banking industry. JEL Classifications: M41; H25; H71; G21.

Determinants of Financial Distress in U.S. Large Bank Holding Companies

2014 ◽  
Author(s):  
Zhichao Zhang ◽  
Li Xie ◽  
Xiangyun Lu ◽  
Zhuang Zhang
Keyword(s):  
Financial Distress ◽  
Bank Holding Companies ◽  
Large Bank ◽  
Holding Companies
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