Events Calendar

Join us to hear from Anthony DeFusco, University of Wisconsin.  His presentation is titled, "Real Effects of Rollover Risk: Evidence from Hotels in Crisis".  

Abstract
We show how firms scheduled to roll over debt in a crisis strategically reduce operations, regardless of their liquidity constraints. Our research design utilizes contractual features of commercial mortgages that generate as-good-as-random variation in whether debt is scheduled to mature during a crisis or just before. Once the crisis begins, borrowers cut labor expenses and produce less output at properties collateralizing loans coming due during the crisis, especially high-leverage loans. These effects hold with owner fixed-effects, consistent with strategic default and not liquidity constraints as the dominant mechanism. A parsimonious model of debt overhang with rollover risk rationalizes these results.

The Clarence Tow Lectures in Finance Series brings high-profile researchers to the Tippie College of Business to present to an audience of faculty, PhD students, and researchers from around the University of Iowa.