Strategic Actions and Credit Spreads: An Empirical Investigation  

Oleh:

Davydenko, Sergei A. ; Strebulaev, Ilya A.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 62 no. 6 (Dec. 2007), page 2633-2671.
Topik: Investigation; Credit
Fulltext: p 2633.pdf (218.48KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

Do strategic actions of borrowers and lenders affect corporate debt values? We find higher bond spreads for that can renegotiate debt contracts relatively easily. Consistent with theories of strategic debt services, the threat of strategic default depresses bond values ex ante, even though there may be efficiency gains from renegotiation ex post. However, the economic significance of the net effect is small, suggesting that bondholders have considerable bargaining power. The effect of strategic action is higher when creditors are particularly vulnerable to strategic threats, including risky firms with high managerial shareholding, simple debt structures, and high liquidation costs.

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