A Theory of Debt Maturity: The Long and Short of Debt Overhang

• 成果类型: Article
• 署名作者: Diamond, Douglas W.; He, Zhiguo
• 署名单位: University of Chicago; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12118
• 发表日期: 2014
• 页码: 719-762
• 关键词: CORPORATE-DEBT; capital structure; liquidity risk; AGENCY COSTS; determinants; OPPORTUNITIES; options

摘要

Debt maturity influences debt overhang, the reduced incentive for highly levered borrowers to make real investments because some value accrues to debt. Reducing maturity can increase or decrease overhang even when shorter term debt's value depends less on firm value. Future overhang is more volatile for shorter term debt, making future investment incentives volatile and influencing immediate investment incentives. With immediate investment, shorter term debt typically imposes lower overhang; longer term debt can impose less if asset volatility is higher in bad times. For future investments, reduced correlation between assets-in-place and investment opportunities increases the shorter term debt overhang.