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Debt Maturity of Italian Firms [PDF]
, 2006 In this paper we test different theories on debt maturity that can be ascribed to either the demand or the supply side of the market. Firm risk, asymmetric information, agency costs are all aspects that should be considered in the analysis. We also include leverage in the firm decision process regarding debt maturity, relying on a simultaneous ...
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Moral hazard and debt maturity
Journal of Financial IntermediationWe present a model of the maturity of a bank's uninsured debt. The bank borrows funds and chooses afterwards the riskiness of its assets. This moral hazard problem leads to an excessive level of risk. Short-term debt may have a disciplining effect on the bank's risk-shifting incentives, but it may lead to inefficient liquidation.
Gur Huberman, Rafael Repullo
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SSRN Electronic Journal, 2015
We study a dynamic setting in which a firm chooses its debt maturity structure and default timing endogenously, both without commitment. The firm, who is waiting for the arrival of an upside event, commits to keep its outstanding bond face-values constant, but controls its debt maturity structure via the fraction of newly issued short-term bonds when ...
Zhiguo He, Konstantin Milbradt
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We study a dynamic setting in which a firm chooses its debt maturity structure and default timing endogenously, both without commitment. The firm, who is waiting for the arrival of an upside event, commits to keep its outstanding bond face-values constant, but controls its debt maturity structure via the fraction of newly issued short-term bonds when ...
Zhiguo He, Konstantin Milbradt
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On the relationship between the debt ratio and debt maturity
Applied Economics Letters, 1995The relationship between government debt and the maturity of government debt is analysed for eight OECD countries. It is found that the negative relationship between debt and effective maturity as reported by Missale and Blanchard (1994) for Ireland and Italy can also be found for some other countries with lower debt ratios.
deHaan, J, Sikken, BJ, Hilder, A
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Debt Covenants, Agency Costs and Debt Maturity
SSRN Electronic Journal, 2008Debt is often issued with restrictive covenants in order to reduce debt-equity agency costs. Utilising covenants in this way introduces owner-manager agency costs that results in shorter term debt than would otherwise be optimal. In the presence of debt-covenants, agency costs drive a concave functional relationship between maturity and leverage.
Jamie Alcock +2 more
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The Quarterly Review of Economics and Finance, 2000
Abstract The maturity structure of private debt decreases with inflation. I argue that this occurs because of the relative price variability that tends to accompany inflation. Additional variability in relative prices aggravates the temptations of debtors to increase risk at the expense of expected returns.
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Abstract The maturity structure of private debt decreases with inflation. I argue that this occurs because of the relative price variability that tends to accompany inflation. Additional variability in relative prices aggravates the temptations of debtors to increase risk at the expense of expected returns.
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The Review of Financial Studies
Abstract This paper studies how a borrower issues long- and short-term debt in response to shocks to the fundamental value. Short-term debt protects creditors from future dilution and incentivizes the borrower to reduce leverage after small negative shocks. Long-term debt postpones default and allows the borrower time to recover after
Yunzhi Hu, Felipe Varas, Chao Ying
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Abstract This paper studies how a borrower issues long- and short-term debt in response to shocks to the fundamental value. Short-term debt protects creditors from future dilution and incentivizes the borrower to reduce leverage after small negative shocks. Long-term debt postpones default and allows the borrower time to recover after
Yunzhi Hu, Felipe Varas, Chao Ying
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Debt composition and debt maturity: the evidence
1999Abstract In the absence of informational asymmetries, expectations failures and market imperfections, the ideal debt instrument would be negatively indexed to public spending and positively indexed to productivity or output. Shiller (1993, ch. 4) suggests issuing debt positively indexed to output as the socially optimal solution. This
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Corporate Debt Maturity - An international comparison of firm debt maturity choices [PDF]
, 2014 This paper explores the determinants of debt maturity for a sample of 3306 non-financial listed firms from thirteen European countries (twelve countries of Euro Zone and United Kingdom) in 2011. According to literature, two sets of explanatory variables are included: (i) characteristics of firms and (ii) institutional environment.
Sandra Correia +2 more
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Investment, Implicit Debt Targets and Debt Maturity
2022We analyse industrial firms’ financial policies by modelling investment and debt issuances as endogenous variables. In our setup, firms issue costly short-and long-term debt to cover their capital expenditure. This strategy does not assume the existence of explicit debt targets but allows the recovery of implicit debt targets from firms’ investment and
Dia, Enzo, Rispoli, Marco
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