With a make-whole call, the call price is calculated as the maximum of the par value and the present value of the bond's remaining payments discounted at the prevailing risk-free rate plus a pre-specified spread known as the make-whole premium. The commonly accepted thumb rule in the investment...

The Spanish language creates a communication barrier with English speaking United States. Insular (Puerto Rican) politicians have resisted reform of Spanish (Peninsular) ancient regime business laws and associated colonial economic institutions. Colonial Spanish commercial civil code has allowed...

We analyze a large sample of recent US corporate bond tender offers to understand what affects tender premiums as well as the percentage of bonds tendered. For the average (median) tender offer, the tender price is 4.75 (3.40) percent greater than the pre-tender market price while the percentage...

We use a structural model to examine whether make-whole call provisions - a recent yet surprisingly common innovation in corporate debt markets - are fairly priced at origination. The call provision cost is calculated as the callable bond yield minus the equivalent non-callable bond yield,...

We examine the investment behavior of firms before and after being spun off from their parent companies. Their investment after the spin-off is significantly more sensitive to measures of investment opportunities (e.g., industry Tobin's Q or industry investment) than it is before the spin-off....

I analyze 181 equity carve-outs to determine whether the transactions are motivated by potential efficiency improvements or by an opportunity to sell overvalued equity. Carve-out operating performance peaks at issue, declining significantly thereafter. Parents sell a greater percentage of shares...

Common perception is that these bonds behave no differently than non-callable bonds due to call provision structure. However, make-whole callable bonds are almost twice as likely to be retired early as equivalent non-callable bonds. Analysis of which bonds/firms include make-whole call...