Strategic actions and credit spreads: An empirical investigation

• 成果类型: Article
• 署名作者: Davydenko, Sergei A.; Strebulaev, Ilya A.
• 署名单位: University of Toronto; Stanford University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2007.01288.x
• 发表日期: 2007
• 页码: 2633-2671
• 关键词: optimal capital structure; ABSOLUTE PRIORITY; corporate-debt; reorganization; default; bankruptcy; COSTS; FIRMS; RISK; term

摘要

Do strategic actions of borrowers and lenders affect corporate debt values ? We find higher bond spreads for firms that can renegotiate debt contracts relatively easily. Consistent with theories of strategic debt service, the threat of strategic default depresses bond values ex ante, even though there may be efficiency gains from renegotiation ex post. However, the economic significance of the net effect is small, suggesting that bondholders have considerable bargaining power. The effect of strategic actions is higher when creditors are particularly vulnerable to strategic threats, including risky firms with high managerial shareholding, simple debt structures, and high liquidation costs.