Insolvency Resolution and the Missing High-Yield Bond Markets

• 成果类型: Article
• 署名作者: Becker, Bo; Josephson, Jens
• 署名单位: Stockholm School of Economics; Stockholm University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhw014
• 发表日期: 2016
• 页码: 2814
• 关键词: capital structure; Bank debt; Financial distress; bankruptcy; CHOICE; COSTS; equilibrium; acquisition; liquidation; reputation

摘要

In many countries, poorly functioning bankruptcy procedures force viable but insolvent firms to restructure out of court, where banks may have a bargaining advantage over other creditors. We model the choice of restructuring process and derive implications for the corporate mix of bank and bond financing. Empirical patterns match the model: inefficient bankruptcy in a country is associated with less bond issuance by risky, but not by safe, borrowers. This pattern holds for both levels of and changes in bankruptcy recovery. Our results establish a link between bankruptcy reform and corporate bond markets, especially high-yield markets. (JEL G32, G33, G21)