Effects of the ownership concentration and the board of directors structure on the covenants of the debenture issued by the Brazilian public companies
DOI:
https://doi.org/10.11606/issn.1982-6486.rco.2019.158820Keywords:
Covenants, Debentures, Ownership concentration, Board of directorsAbstract
This study aims to identify factors of corporate governance that affect the amount of financial covenants present in the debenture contracts and the restriction arising from the financial covenant "Net Financial Debt/EBITDA". The data were analyzed through multiple regression and logistic regression and the results indicate that the ownership concentration and the size of the board of directors are decisive in determining the number of financial covenants included in the contracts of the debentures issued. In addition, the results point out that the ownership concentration, size and independence of the board of directors influenced the likelihood that the debenture deed would contain a more or less restrictive "Net Financial Debt / EBITDA" covenant. As a contribution, this paper shows that the issuers of debentures can seek substitute mechanisms for the use and restriction of financial covenants. And, thus avoid the obstacles arising from these contractual clauses and provides support to the literature that internal corporate governance mechanisms have an impact the amount of financial covenants as to the restriction imposed by the covenant of indebtedness in contracts of debentures.
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