Ashcraft, Adam B.; Santos, João A.C. - In: Journal of Monetary Economics 56 (2009) 4, pp. 514-523
Many have claimed that credit default swaps (CDSs) have lowered the cost of debt financing to firms by creating new hedging opportunities and information for investors. This paper evaluates the impact that the onset of CDS trading has on the spreads that underlying firms pay to raise funding in...