The At Issue Maturity of Corporate Bonds: The Influence of Credit Rating, Security Level, Duration and Macreoconomic Conditions
We examine the determinants of the at issue time to maturity of corporate bonds. We find evidence that corporations partly determine the at issue maturity of bonds by responding to economic conditions. They also appear to immunize by matching the maturity of assets with the at issue maturity of bonds regardless of credit quality. Finally, we find evidence that the security level (our proxy for the recovery rate) is inversely related to the at issue time to maturity. This suggests that lenders use the promised maturity and security level bond covenants as screening mechanisms to overcome some of the asset substitution and adverse selection problems associated with buying bonds that are subject to credit risk.
|Date of creation:||Jan 2003|
|Contact details of provider:|| Postal: PO Box 218, Whiteknights, Reading, Berks, RG6 6AA|
Phone: +44 (0) 118 378 8226
Fax: +44 (0) 118 975 0236
Web page: http://www.henley.reading.ac.uk/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sudipto Sarkar, 1999. "Illiquidity Risk, Project Characteristics, And The Optimal Maturity Of Corporate Debt," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 22(3), pages 353-370, 09.
- Sarkar, Sudipto, 1999. "Illiquidity Risk, Project Characteristics, and the Optimal Maturity of Corporate Debt," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 22(3), pages 353-370, Fall.
- Fama, Eugene F., 1984. "The information in the term structure," Journal of Financial Economics, Elsevier, vol. 13(4), pages 509-528, December.
- Barclay, Michael J & Smith, Clifford W, Jr, 1995. " The Maturity Structure of Corporate Debt," Journal of Finance, American Finance Association, vol. 50(2), pages 609-631, June.
- Mitchell, Karlyn, 1991. "The Call, Sinking Fund, and Term-To-Maturity Features of Corporate Bonds: An Empirical Investigation," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 26(02), pages 201-222, June.
- Diamond, Douglas W., 1993. "Seniority and maturity of debt contracts," Journal of Financial Economics, Elsevier, vol. 33(3), pages 341-368, June.
- Ramon E. Johnson, 1967. "Term Structures Of Corporate Bond Yields As A Function Of Risk Of Default," Journal of Finance, American Finance Association, vol. 22(2), pages 313-345, 05.
- Hardouvelis, Gikas A, 1988.
" The Predictive Power of the Term Structure during Recent Monetary Regimes,"
Journal of Finance,
American Finance Association, vol. 43(2), pages 339-356, June.
- Gikas A. Hardouvelis, 1987. "The predictive power of the term structure during recent monetary regimes," Research Paper 8708, Federal Reserve Bank of New York.
- Jeff Jewell & Miles Livingston, 1998. "Split Ratings, Bond Yields, And Underwriter Spreads," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 21(2), pages 185-204, 06. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:rdg:icmadp:icma-dp2003-01. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie Pearson)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.