This paper develops a new model of debt renegotiation in a structural framework, that accounts for both taxes and … coupon reduction to creditors, given that the new coupon is chosen such that debt value remains constant. Our result shows … firm without hurting the creditors. This model of debt renegotiation can be viewed as a way of passing from a junk bond to …

This paper investigates the likelihood of corporate insolvency and the potential implications of debt overhang of non … investment, it examines the potential impact of higher debt levels on investment during the recovery. Against this background … potentially affect otherwise viable firms, and to lessen the risk of debt-overhang, which could slow down the speed of recovery. …