We provide the first empirical analysis on the effects of credit default swaps (CDS) on corporate distress resolution with a focus on debt recovery rate. CDS contracts are settled shortly after the occurrence of credit events such as restructuring or bankruptcy filings and, presumably, should...

We examine the impact of the unobservable systematic risk factor on default prediction model performance. We find that including the unobservable systematic risk factor might help improve predictive accuracy, but it might not help improve rank ordering of firms by default risk. Rank ordering is...

This paper examines the determinants of the outcomes of the default recovery process. We find that a new variable that incorporates not only the percentage of debt more senior to the debt instrument, but also debt at the same rank, is the most important factor driving the recovery rate. It is...