Corporate Debt Maturity Profiles
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Author | : Jaewon Choi |
Publisher | : |
Total Pages | : 44 |
Release | : 2017 |
Genre | : Corporate debt |
ISBN | : |
We study a novel aspect of a firm's capital structure, namely the profile of its debt maturity dates. In a simple theoretical framework we show that the dispersion of debt maturities constitutes an important dimension of capital structure choice, driven by firm characteristics and debt rollover risk. Guided by these predictions we establish two main empirical results. First, using an exogenous shock to rollover risk, we document a significant increase in maturity dispersion for firms that need to roll over maturing debt. Second, we find strong support that maturities of newly issued debt are influenced by pre-existing maturity profiles.
Author | : Sophia Chen |
Publisher | : International Monetary Fund |
Total Pages | : 77 |
Release | : 2019-02-05 |
Genre | : Business & Economics |
ISBN | : 1484397630 |
The maturity structure of debt can have financial and real consequences. Short-term debt exposes borrowers to rollover risk (where the terms of financing are renegotiated to the detriment of the borrower) and is associated with financial crises. Moreover, debt maturity can have an impact on the ability of firms to undertake long-term productive investments and, as a result, affect economic activity. The aim of this paper is to examine the evolution and determinants of debt maturity and to characterize differences across countries.
Author | : Jaewon Choi |
Publisher | : |
Total Pages | : |
Release | : 2013 |
Genre | : |
ISBN | : |
We study to what extent firms spread out their debt maturity dates across time, which we call "granularity of corporate debt." We consider the role of debt granularity using a simple model in which a firm's inability to roll over expiring debt causes inefficiencies, such as costly asset sales or underinvestment. Since multiple small asset sales are less costly than a single large one, firms may diversify debt rollovers across maturity dates. We construct granularity measures using data on corporate bond issuers for the 1991-2011 period and establish a number of novel findings. First, there is substantial variation in granularity in that many firms have either very concentrated or highly dispersed maturity structures. Second, our model's predictions are consistent with observed variation in granularity. Corporate debt maturities are more dispersed for larger and more mature firms, for firms with better investment opportunities, with higher leverage ratios, and with lower levels of current cash flows. We also show that during the recent financial crisis especially firms with valuable investment opportunities implemented more dispersed maturity structures. Finally, granularity plays an important role for bond issuances, because we document that newly issued corporate bond maturities complement pre-existing bond maturity profiles.
Author | : Carolyn Kay Brancato |
Publisher | : |
Total Pages | : 48 |
Release | : 1986 |
Genre | : Corporate debt |
ISBN | : |
Author | : Lina I. Sharara-Taher |
Publisher | : |
Total Pages | : |
Release | : 1994 |
Genre | : |
ISBN | : |
Author | : Fabio Schiantarelli |
Publisher | : World Bank Publications |
Total Pages | : 44 |
Release | : 1997 |
Genre | : Corporate debt |
ISBN | : |
Author | : Mark Hoven Stohs |
Publisher | : |
Total Pages | : 362 |
Release | : 1994 |
Genre | : |
ISBN | : |
Author | : Karlyn Mitchell |
Publisher | : |
Total Pages | : 58 |
Release | : 1984 |
Genre | : Corporations |
ISBN | : |
Author | : James Russell Morris |
Publisher | : |
Total Pages | : 46 |
Release | : 1974 |
Genre | : Bonds |
ISBN | : |
Author | : Liang Tang |
Publisher | : |
Total Pages | : 210 |
Release | : 1999 |
Genre | : Corporate debt |
ISBN | : |