We investigate the liquidity management of firms following the inception of credit default swaps (CDS) markets on their … debt, which allow hedging and speculative trading on credit risk to be carried out by creditors and other parties. We find …

Intuition suggests that firms with higher cash holdings are safer and should have lower credit spreads. Yet empirically …, the correlation between cash and spreads is robustly positive and higher for lower credit ratings. This puzzling finding … are positively related to credit risk, resulting in a positive correlation between cash and spreads. In contrast, spreads …

Credit default swaps (CDS) are unfunded, or the synthetic form of credit exposure, while bonds are fully funded, thus … the cash form. Borrowing this industry jargon, credit valuation adjustment (CVA) would be seen synthetic, because it is …

This paper analyzes influences on the credit standing of Multilateral Development Banks (MDBs), specifically the … its MDB rating process. The results are compared with those implied by an industry-standard, ratings-based Credit Risk …