We analyse security design parameters of 1,115 high yield (HY) and investment grade (IG) event risk covenants (ERC) protected issues between 1986 and 2012 from the agency conflict perspective. We find positive and significant stock price reaction to the issuance of HY but not the IG issues....

Differences in management and shareholders priorities have been recognized and accepted to exist creating problems in the agency to which financial theorists opined that dividend payments is the best means of resolving the conflict. Results obtained using the multiple regression equation model...