Governance mechanisms and bond prices

• 成果类型: Article
• 署名作者: Cremers, K. J. Martijn; Nair, Vinay B.; Wei, Chenyang
• 署名单位: Yale University; University of Pennsylvania; Federal Reserve System - USA; Federal Reserve Bank - New York
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/revfin/hhm006
• 发表日期: 2007
• 页码: 1359
• 关键词: CORPORATE GOVERNANCE; institutional investors; UNITED-STATES; AGENCY COSTS; EVENT RISK; Firm value; OWNERSHIP; returns; WEALTH; BONDHOLDERS

摘要

We investigate the effects of shareholder governance mechanisms on bondholders and document two new findings. First, the impact of shareholder control (proxied by large institutional blockholders) on credit risk depends on takeover vulnerability. Shareholder control is associated with higher (lower) yields if the firm is exposed to (protected from) takeovers. In the presence of shareholder control, the difference in bond yields due to differences in takeover vulnerability can be as high as 66 basis points. Second, event risk covenants reduce the credit risk associated with strong shareholder governance. Therefore, without bond covenants, shareholder governance, and bondholder interests diverge.