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Publicly-traded debt securities differ on a number of dimensions, including quality, maturity, seniority, security, and …, growth opportunities and cash holdings are related with the convertibility, maturity and security structure of issued bonds … the types of securities that are issued. Consistent with commonly stated 'maturity-matching' arguments, long …
Persistent link: https://www.econbiz.de/10012464940
A firm chooses its debt maturity structure and default timing dynamically, both without commitment. Via the fraction of … newly issued short-term bonds, equity holders control the maturity structure, which affects their endogenous default …
Persistent link: https://www.econbiz.de/10012456753
We argue that time-series variation in the maturity of aggregate corporate debt issues arises because firms behave as … macro liquidity providers, absorbing the large supply shocks associated with changes in the maturity structure of government … periods when the ratio of government debt to total debt is higher; and ii) by firms with stronger balance sheets. Our theory …
Persistent link: https://www.econbiz.de/10012464558
We present a DSGE model where firms optimally choose among alternative instruments of external finance. The model is used to explain the evolving composition of corporate debt during the financial crisis of 2008-09, namely the observed shift from bank finance to bond finance, at a time when the...
Persistent link: https://www.econbiz.de/10012457936
Furthermore, equilibria may display specialization on the part of identical firms and, when equilibria are constrained inefficient, may exhibit excessive aggregate risk. Financial decisions of the corporate sector are determined at equilibrium and depend not only on the nature of financial...
Persistent link: https://www.econbiz.de/10012458322
of the maturity structure of debt. The objective of a firm with long-term assets is to maximize the effective maturity of … its liabilities across several refinancing cycles, rather than to maximize the maturity of the current bonds outstanding …. An advantage of short-term financing is that a firm, while in good financial health, can readjust its maturity structure …
Persistent link: https://www.econbiz.de/10012463920
-varying debt maturity choices, as well as its implications for the term structure of credit spreads. Compared to short-term debt … liquidity costs changing over the business cycle, our calibrated model implies that debt maturity is pro-cyclical, firms with … high systematic risk favor longer debt maturity, and that these firms will have more stable maturity structures over the …
Persistent link: https://www.econbiz.de/10012460293
We provide new evidence that debt creates shareholder value for firms that face agency costs. Our tests are unique in two respects. First, we focus on a sample of firms with potentially extreme agency problems. We study emerging market firms where the routine use of pyramid ownership structures...
Persistent link: https://www.econbiz.de/10012470266
We study rollover risk and collateral value in a dynamic asset pricing model with endogenous debt financing by extending the framework of Geanakoplos (2009) with a generic binomial tree and time-varying heterogeneous beliefs. Optimistic borrowers face rollover risk if the belief dispersion...
Persistent link: https://www.econbiz.de/10012460724
heterogeneity in financial contracting at the onset of the crisis by exploring ex-ante variation in long-term debt maturity. Our … credit supply shocks on corporate policies. For example, in the absence of a credit shock ("normal times"), the maturity … composition of long-term debt has no effect on investment outcomes. Likewise, maturity composition has no impact on investment …
Persistent link: https://www.econbiz.de/10012463659