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Corporate Borrowing and Debt Maturity: The Effects of Market Access and Crises

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  • Schmukler, Sergio
  • Cortina Lorente, Juan
  • Didier, Tatiana

Abstract

This paper studies how access to different markets and crises impact debt financing and maturity. Using data on worldwide corporate issuance activity in domestic and international bond and syndicated loan markets during 1991-2014, the paper shows that these markets are affected differently by crises, while providing financing to different firms at distinct maturities. During the global financial crisis and domestic banking crises, large firms moved away from the crisis-hit markets toward less affected, longer-term ones, switching their financing sources. Hence, firms that switched markets compensated for the financing shocks and maintained, or increased, their borrowing maturity. Country-level maturities also remained stable or even lengthened. However, firms that did not move across markets typically experienced declining financing and shorter borrowing maturities. Firm movements across markets are consistent with credit tightening during crises due to supply-side shocks, significantly affecting debt composition, borrowing maturity, and credit redistribution across firms of different sizes.

Suggested Citation

  • Schmukler, Sergio & Cortina Lorente, Juan & Didier, Tatiana, 2018. "Corporate Borrowing and Debt Maturity: The Effects of Market Access and Crises," CEPR Discussion Papers 13008, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:13008
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    Cited by:

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    2. Chiara Broccolini & Giulia Lotti & Alessandro Maffioli & Andrea F Presbitero & Rodolfo Stucchi, 2021. "Mobilization Effects of Multilateral Development Banks," The World Bank Economic Review, World Bank Group, vol. 35(2), pages 521-543.
    3. Ananou, Foly & Chronopoulos, Dimitris K. & Tarazi, Amine & Wilson, John O.S., 2021. "Liquidity regulation and bank lending," Journal of Corporate Finance, Elsevier, vol. 69(C).

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    More about this item

    Keywords

    Borrowing maturity; Capital raising; Debt markets; Firm financing; Global financial crisis (gfc); Syndicated loans; Corporate bonds;
    All these keywords.

    JEL classification:

    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G00 - Financial Economics - - General - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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