تامین مالی بانک و ثروت سهامداران

This article shows that European firms do their shareholders a disservice if they use bank financing, especially if that financing comes with restrictive covenants and floating interest rates. The restrictive covenants discourage expansion and the floating interest rates make the firm's cash flows less stable. The better way to finance the firm is with fixed-rate bonds. With bond financing, the covenants are less restrictive and the firm's interest expense is more stable. The simulation approach which the authors have developed gives estimates of how much each attribute of the financing affects the company's share price. The effects that they found are large — for example, choosing fixed-rate bond financing over floating-rate bank financing adds 17.4 per cent to the stock price. Interest expense is an important component of cost in the author's simulation, and making it fixed instead of floating brings enough stability to the firm's cash flow to deliver a large increase in the stock price. Also, postponing a new factory, as managers might do to avoid violating the restrictive covenants of bank loans, lowers the stock price 19.7 per cent. In the simulation, the firm has adequate capacity at the beginning, but in many scenarios becomes capacity-constrained after one or two years. Stock market investors gain if the company buys the factory sooner, because they place a high value on growth and market share.

When a company borrows money from a bank, the loan agreement often imposes covenants restricting the company's freedom to expand. When the same company sells bonds, the covenants are usually fewer and less binding. Bank loan covenants are usually expressed as ratios that cannot be exceeded, while bond covenants are usually expressed in terms of priority and subordination. Bank financing was competitive with bond financing for centuries but now suffers disadvantages. These include the Basle Accord capital requirements for banks, which tend to make bank loans more expensive than bond financing. Other disadvantages relate to the bank's maturity mismatch if it gives long-term fixed-rate financing to a borrower. Banks can push this cost onto the borrower by readjusting the borrower's interest rate periodically, or they can price the loan high enough to cover the cost of hedging against increases in the bank's cost of funds. But inescapably banks suffer as providers of long-term financing because their depositors are risk-averters who seek short-term, guaranteed investments. Bond buyers, in contrast, are desirous of holding longer-term paper, or at least are willing to hold it. Depositors at the typical bank insist on shorter terms for repayment. The most important disadvantage, however, has come to the fore only recently, but is now preeminent, and concerns the effect that the type of financing has on the borrower's share price. Day-to-day stock market performance is now a key factor for the prosperity and survival of every publicly-quoted company. Often when an industrial company borrows from a bank, the company chooses floating-rate terms, in effect betting that the cost of interest rate readjustments will be lower than the bank's alternative quote for fixed-rate financing. The floating interest rate may indeed be cheaper over time, but it increases the uncertainty of the borrower's future cash flows. The borrower then looks riskier to a perspicacious buyer of shares, so choosing bank financing with floating interest rate over bond financing with fixed rates has a cost to shareholders. Moreover, the company that habitually uses bank financing may defer expansion and choose slower growth to avoid falling into violation of restrictive covenants on its bank financing. Deferring expansion is another effect of choosing bank financing that may hurt the company's share price. The costs of these differences between bank financing and bond financing can be modeled and quantified in a way that takes several differences into account and estimates the reduction in the company's stock price that these differences cause.

European corporate managers are becoming sensitized to the potential effects of their actions on the prices of their companies' shares. They are aware that expanding capacity ahead of market demand can create shareholder value. The difficulty is deciding when aggressiveness should win over prudence. Conventional bank lending relationships favor prudence to the detriment of shareholder value, especially in view of the Basle restrictions on bank capital. Bank loan agreements have to protect the bank and transfer interest rate risk onto the borrower's shareholders. European corporate managers are on the lookout for opportunities to finance by issuing bonds whenever bonds are cheaper, or whenever the bond market alternative exists. This article gives them more reasons to seek bond financing, even if it is no cheaper in terms of interest expense. Restrictive covenants and floating rate debt are worth avoiding, and the value to shareholders of avoiding them can be computed explicitly. Widely used formulas for computing stock prices implicitly favor expanding fast and paying for the expansion by issuing fixed-rate bonds. Those formulas penalize companies that postpone expansion and finance with floating-rate bank loans that have restrictive covenants.