Florin Vasvari awarded AXA research grant
Florin Vasvari, Assistant Professor of Accounting, has been awarded a coveted grant to support his research into debt contracts.
The €82,000 grant from the AXA Research Fund will support his work on ‘Covenants in private and public debt contracts and their effects on corporate performance’, which will be carried out jointly with Yun Lou, a third year doctoral student in accounting.
The project will look at the role of covenants in debt contracts in determining corporate operational and financial performance. Covenants are essential structural features of debt contracts and their main purpose is to ensure that borrowers meet minimum repayment requirements within acceptable credit risk limits.
Overly-relaxed covenants allow borrowers to engage in excessively risky activities and leave lenders with a limited ability to intervene. Conversely, strict covenant packages may set inadequate limits on firms’ financial and investment policies and restrict the operating flexibility of companies.
Florin’s research will look at the covenants’ effectiveness as a monitoring device as well as the extent to which a covenant package can be optimal to the firm and its stakeholders, including debtholders.
Applications were assessed on both their academic excellence and their innovative and original approach. Randall Peterson, Faculty Dean, commented “We are very pleased that Florin’s work has been recognised through this award, which will enable him to carry out this innovative and timely project”.
The AXA Research Fund has been set up by the AXA Group to encourage research in a number of disciplines that touch on the risks, challenges and major transformations that affect our rapidly changing world. The Fund will award 100 million Euros over five years to finance innovative research.
Florin joined the School in 2006 from Rotman School of Management at the University of Toronto. His research interests lie in the area of debt markets and private equity leveraged transactions.