... Chen (2003), and Bris, Welch, and Zhu (2006).Corporate finance models such as Berglăof and von Thadden (1994), Bolton and Scharfstein (1996), and Hackbarth, Hennessy, and Leland (2007) study ... most onetrade per firm in any given month, by randomly choosing one trade for each Strategic Actions and Credit Spreads 2635but the empirical importance of strategic actions for spreads thus ... spreads, and if so, when is the effect most pronounced? As Hart and Moore(1998) and Fan and Sundaresan (2000) point out, the effect of renegotiation ondebt value is twofold. On the one hand, in...