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Housing, financial conditions and mental health during a pandemic

Author

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  • Marco Felici

Abstract

DeAngelo, Gonçalves, and Stulz (2018) offer a “credit-card” perspective of debt and document that firms periodically deleverage to restore financial flexibility. However, the valuation consequences of deleveraging have been left unexplored. Lines of credit, closely monitored by the associated lending institutions, represent the closest analog to corporate credit-cards. Employing a sample of equity issuances, we find that deleveraging via repayments of credit lines is viewed favorably by markets. We posit that repayments replenish credit lines and restore financial flexibility, while preserving bank monitoring (Acharya, Almeida, Ippolito, Perez, 2014). We refer to the integrated beneficial effect as Monitored Financial Flexibility.

Suggested Citation

  • Marco Felici, 2022. "Housing, financial conditions and mental health during a pandemic," ERES 2022_125, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:2022_125
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    File URL: https://eres.architexturez.net/doc/eres-id-eres2022-125
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    More about this item

    Keywords

    Credit lines; Deleveraging; Monitored financial flexibility; Real Estate Investment Trusts (REITs);
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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