The secured credit premium and the issuance of secured debt

• 成果类型: Article
• 署名作者: Benmelech, Efraim; Kumar, Nitish; Rajan, Raghuram
• 署名单位: Northwestern University; National Bureau of Economic Research; State University System of Florida; University of Florida; University of Chicago; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2022.06.005
• 发表日期: 2022
• 页码: 143-171
• 关键词: business cycles; collateral; credit spreads; SECURED DEBT

摘要

Credit spreads for secured debt are lower than for unsecured debt, especially when a firm's credit quality deteriorates, the economy slows, or average credit spreads widen. Yet investment-grade firms tend to be reluctant to issue secured debt at all times. In contrast, we find that for firms that are rated below investment grade, the likelihood of secured debt issuance increases as firm credit quality deteriorates, the economy slows, or average credit spreads widen. This differential pattern of issue behavior is consistent with highly rated firms seeing unencumbered collateral as a form of insurance, to be used only in ex-tremis.(c) 2022 Elsevier B.V. All rights reserved.