Risk management and private debt contracts: The role of weather derivatives
利用能源公司数据和1997年天气衍生品引入作为自然实验，发现借款企业使用天气衍生品对冲后银行贷款利率平均降低21个基点，且对冲企业更愿提供抵押、接受更严格契约，并降低违约风险。
Abstract Using energy firm data and the 1997 introduction of weather derivatives as a natural experiment, we document an average 21‐basis‐point interest reduction in bank loans after borrowers hedge with weather derivatives. This saving increases among borrowers with higher risk or less complex financial reports, and during more uncertain market conditions or when investors pay more attention to climate risks. Our results are robust to endogeneity‐corrected methods. Hedging firms are more willing to pledge collateral, accept stricter covenants and exhibit lower risks and a lower likelihood of covenant violations within 1 year following loan origination. We also find hedging firms have lower bond yields and a lower bank debt ratio, indicating that the benefits from hedging with weather derivatives extend to the public debt market. Overall, our findings demonstrate important financial implications of hedging using weather derivatives.