The Price of Law: The Case of the Eurozone Collective Action Clauses

• 成果类型: Article
• 署名作者: Carletti, Elena; Colla, Paolo; Gulati, Mitu; Ongena, Steven
• 署名单位: Bocconi University; Duke University; Swiss Finance Institute (SFI); University of Zurich; KU Leuven
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhaa140
• 发表日期: 2021
• 页码: 5933
• 关键词: SOVEREIGN BOND CONTRACTS; Credible commitment; negative equity; debt; liquidity; institutions; AREA; US

摘要

We analyze the price effect of the introduction of collective action clauses (CACs) in newly issued sovereign bonds of eurozone countries as of January 1, 2013. By allowing a majority of creditors to modify payment obligations, such clauses reduce the likelihood of holdouts, while facilitating strategic default by the sovereign. We find that CAC bonds trade in the secondary market at lower yields than otherwise similar no-CAC bonds. The yield differential widens in countries with worse ratings and in those with stronger legal systems, especially if of midrange quality. Hence, CACs are seen as pro- rather than anticreditor provisions.