Corporations often use affiliated firms as guarantors when issuing guaranteed bonds, thus combining external financing with internal credit enhancements. In this study, we empirically examine the potential determinants of corporate guaranteed debt issuance. We find evidence that issuers with...

There is no consensus on whether macroeconomic fundamentals have any predictive power for bond risk premia, either unconditionally or conditionally over bond yields. Using Adaptive Group LASSO, a machine learning algorithm, we are able to construct a new, parsimonious macro variable that is...

In this paper, we find that the conflict of interest between loan holders and bondholders is positively related to bond IPO underpricing, which serves as a compensation to the initial bond investors. We construct four proxies for the conflict between loan holders and bondholders, namely, a loan...

This paper shows that bond market liquidity plays an important role in determining corporate debt contracts. We find that bonds with better expected market liquidity are issued with fewer restrictive covenants, longer maturities, and lower offering yield spreads. These results are robust to a...

This paper examines the effects of bond liquidity on firms' investments. We postulate that bond liquidity increases firms' investment opportunities by reducing the cost of capital and improving access to financing. Using the exogenous variation in liquidity generated by the introduction of...

This paper employs data on corporate bond mutual fund flows to investigate bond investments under low interest rates. In response to the Fed’s lower interest rate policy, we find that investment-grade bond funds receive inflows, while high-yield bond funds are not responsive. This result can...