Hedging or market timing? Selecting the interest rate exposure of corporate debt

• 成果类型: Article
• 署名作者: Faulkender, M
• 署名单位: Washington University (WUSTL)
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2005.00751.x
• 发表日期: 2005
• 页码: 931-962
• 关键词: risk-management; financial risk; FIRMS; determinants; maturity; INVESTMENT; issues

摘要

This paper examines whether firms are hedging or timing the market when selecting the interest rate exposure of their new debt issuances. I use a more accurate measure of the interest rate exposure chosen by firms by combining the initial exposure of newly issued debt securities with their use of interest rate swaps. The results indicate that the final interest rate exposure is largely driven by the slope of the yield curve at the time the debt is issued. These results suggest that interest rate risk management practices are primarily driven by speculation or myopia, not hedging considerations.