How long do junk bonds spend in default?

• 成果类型: Article
• 署名作者: Helwege, J
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - New York
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/0022-1082.00107
• 发表日期: 1999
• 页码: 341-357
• 关键词: Financial distress; DEBT RESTRUCTURINGS; MANAGEMENT TURNOVER; CHAPTER-11; bankruptcy; reorganization; WORKOUTS; INVESTMENT; priority; FIRMS

摘要

This paper analyzes junk bond defaults during 1980 to 1991 to determine which factors affect the length of time spent in default. Bondholder holdouts are not a significant problem, as firms with proportionately more bonds have shorter default spells. In contrast, bank debt is associated with slower restructurings. Bargaining problems arising from contingent liabilities, lawsuits, and size delay the process, although multiple bond classes do not. Neither information problems nor firm value appear to matter. HLTs do not resolve their defaults at a significantly faster pace. Defaults tend to take less time in the 1990s, despite Drexel's disappearance from the market.