Hot debt market - Adverse selection costs as a debt issue driver
... debt issue volume, or the hot debt market. Following the pecking order theory of capital structure, I hypothesize that high information asymmetry between investors and managers hinders companies from issuing equity and, instead, prompts firms to time their debt issues to that point of time. I also e ...
... debt issue volume, or the hot debt market. Following the pecking order theory of capital structure, I hypothesize that high information asymmetry between investors and managers hinders companies from issuing equity and, instead, prompts firms to time their debt issues to that point of time. I also e ...
PLI Text Article
... provide exceptions for a change in a term that is agreed to by the parties but is subject to reasonable closing conditions or that occurs as a result of bankruptcy proceedings.28 In these cases, a modification occurs on the date the change in the term becomes effective.29 Thus, if the conditions do ...
... provide exceptions for a change in a term that is agreed to by the parties but is subject to reasonable closing conditions or that occurs as a result of bankruptcy proceedings.28 In these cases, a modification occurs on the date the change in the term becomes effective.29 Thus, if the conditions do ...
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... lower haircuts compared to post-default cases (18% vs. 48% for post-default cases), a much shorter duration of debt renegotiation (1 year vs. 5 years), and significantly lower output losses (post-default cases see a protracted decline in GDP after crisis start, while preemptive cases do not). Furthe ...
... lower haircuts compared to post-default cases (18% vs. 48% for post-default cases), a much shorter duration of debt renegotiation (1 year vs. 5 years), and significantly lower output losses (post-default cases see a protracted decline in GDP after crisis start, while preemptive cases do not). Furthe ...
Initial Phase - World Bank Group
... “Reorganization value” - “going concern” value plus the “upside” (future expectation) ...
... “Reorganization value” - “going concern” value plus the “upside” (future expectation) ...
Default, Debt Maturity and Investment Dynamics
... this will reduce its likelihood of default, and in turn, justify the high debt price. The converse is true if debt prices are low. In the context of a mixed-maturity model, I show that this mutliplicity problem is amplified. This is because even conditional on not defaulting on the current period, t ...
... this will reduce its likelihood of default, and in turn, justify the high debt price. The converse is true if debt prices are low. In the context of a mixed-maturity model, I show that this mutliplicity problem is amplified. This is because even conditional on not defaulting on the current period, t ...
Felonious, Erroneous, It`s All Odious: A Story of Debt Gone Wrong
... the Paris Club,6 representing one-third of its total postregime external debts, down 80 percent.7 It did so with the support of key U.S. and World Bank (or “the Bank”) officials who advocated for the forgiveness of Iraqi bond debt that was used for odious purposes.8 At its core, the doctrine of odio ...
... the Paris Club,6 representing one-third of its total postregime external debts, down 80 percent.7 It did so with the support of key U.S. and World Bank (or “the Bank”) officials who advocated for the forgiveness of Iraqi bond debt that was used for odious purposes.8 At its core, the doctrine of odio ...
Debt Maturity and the Dynamics of Leverage
... the mix of debt and equity used to refinance maturing debt, but covenants do not allow them to increase the total face value of debt. If firms wish to do increase the face value of debt they must first repurchase the existing debt before they can make discrete capital structure adjustments. They are ...
... the mix of debt and equity used to refinance maturing debt, but covenants do not allow them to increase the total face value of debt. If firms wish to do increase the face value of debt they must first repurchase the existing debt before they can make discrete capital structure adjustments. They are ...
Debt Structure and Financial Flexibility
... consider how the total level of debt, maturity, security, and priority may potentially impact a firm’s ability to raise new financing and undertake profitable investments. I find that firms with lower total debt (high debt capacity) are more financially flexible. Lower leverage increases future new ...
... consider how the total level of debt, maturity, security, and priority may potentially impact a firm’s ability to raise new financing and undertake profitable investments. I find that firms with lower total debt (high debt capacity) are more financially flexible. Lower leverage increases future new ...
SWD(2014) 61 final - European Commission
... record numbers of bankruptcies in most Member States, improving the efficiency of insolvency laws in the EU has become an important factor in supporting the economic recovery. In recent years, an average of 200,000 firms went bankrupt each year in the EU, resulting in direct job losses totalling 5.1 ...
... record numbers of bankruptcies in most Member States, improving the efficiency of insolvency laws in the EU has become an important factor in supporting the economic recovery. In recent years, an average of 200,000 firms went bankrupt each year in the EU, resulting in direct job losses totalling 5.1 ...
Linkages across Sovereign Debt Markets
... simultaneously. Foreign defaults also make it more difficult for the home country to service the debt because these defaults lower lenders’ payoffs, which in turn tighten bond prices at home. This dependency arises during fundamental foreign defaults, where the foreign country defaults because of h ...
... simultaneously. Foreign defaults also make it more difficult for the home country to service the debt because these defaults lower lenders’ payoffs, which in turn tighten bond prices at home. This dependency arises during fundamental foreign defaults, where the foreign country defaults because of h ...
Debt Specialization - Bocconi University
... assets, high leverage, and a credit rating use multiple sources. These cross-sectional correlations suggest several possible explanations for the observed pattern of debt specialization. We focus on the potential economic benefits associated with the usage of few debt types, such as lower bankruptcy ...
... assets, high leverage, and a credit rating use multiple sources. These cross-sectional correlations suggest several possible explanations for the observed pattern of debt specialization. We focus on the potential economic benefits associated with the usage of few debt types, such as lower bankruptcy ...
Funding Strategies of Sovereign Debt Management: A Risk
... debt management objectives, i.e. a shift from a macroeconomic perspective to the expected cost minimization objective (Hoogduin et al., 2010). Nowadays most of the debt management offices worldwide follow the Guidelines for Public Debt Management published by the IMF and the World Bank in 2001: “The ...
... debt management objectives, i.e. a shift from a macroeconomic perspective to the expected cost minimization objective (Hoogduin et al., 2010). Nowadays most of the debt management offices worldwide follow the Guidelines for Public Debt Management published by the IMF and the World Bank in 2001: “The ...
NBER WORKING PAPER SERIES DEBT MATURITY: IS LONG-TERM DEBT OPTIMAL? Laura Alfaro
... Brazil, Argentina—governments borrowed large amounts of short-maturity liabilities. Each of these countries subsequently had to roll over large amounts of short-term debt to meet its payment obligations.1 Scholars have argued that short-term liabilities render an economy particularly vulnerable as t ...
... Brazil, Argentina—governments borrowed large amounts of short-maturity liabilities. Each of these countries subsequently had to roll over large amounts of short-term debt to meet its payment obligations.1 Scholars have argued that short-term liabilities render an economy particularly vulnerable as t ...
Equity Auctions and the New Value Corollary to the
... exchange for their claims one of two different package of securities in the new company. In rejecting the unsecured creditors’ claim that the “fixed principal” stated in Northern Pacific Railway required unsecured creditors be paid in full before stockholders could retain any interest in the reorgan ...
... exchange for their claims one of two different package of securities in the new company. In rejecting the unsecured creditors’ claim that the “fixed principal” stated in Northern Pacific Railway required unsecured creditors be paid in full before stockholders could retain any interest in the reorgan ...
Voluntary Sovereign Debt Exchanges
... In sovereign debt restructurings the government swaps previously issued debt for new debt. This paper studies restructurings that are characterized by (i) the absence of missed debt payments prior to the restructurings, (ii) reductions in the government’s debt burden, and (iii) increases in the mark ...
... In sovereign debt restructurings the government swaps previously issued debt for new debt. This paper studies restructurings that are characterized by (i) the absence of missed debt payments prior to the restructurings, (ii) reductions in the government’s debt burden, and (iii) increases in the mark ...
Lost and Found: Market Access and Public Debt Dynamics
... also a very relevant topic, including in resolving public debt crisis, because the IMF can legally lend large amount of resources (the so-called “exceptional access” cases) only if the country satisfies a number of conditions, including having prospects for gaining/regaining access to private capita ...
... also a very relevant topic, including in resolving public debt crisis, because the IMF can legally lend large amount of resources (the so-called “exceptional access” cases) only if the country satisfies a number of conditions, including having prospects for gaining/regaining access to private capita ...
Bubbles and Self-enforcing Debt (November 2007, with Guido Lorenzoni)
... basically turns into a borrower, since he accepts a payment today in exchange for future payments. But what guarantees that this agent will fulfill his future obligations? In BR, this question does not arise, since the latter agent is assumed to have commitment power for exogenous reasons. The issue ...
... basically turns into a borrower, since he accepts a payment today in exchange for future payments. But what guarantees that this agent will fulfill his future obligations? In BR, this question does not arise, since the latter agent is assumed to have commitment power for exogenous reasons. The issue ...
Medium Term Debt Strategy
... Following the upgrade of Tonga to a moderate risk level, the MoFNP continues to be cautious and to closely monitor GoT’s debt sustainability level in line with the recommended targets. During this initial MTDS period, practical options must be identified for GoT to implement in order to keep its fut ...
... Following the upgrade of Tonga to a moderate risk level, the MoFNP continues to be cautious and to closely monitor GoT’s debt sustainability level in line with the recommended targets. During this initial MTDS period, practical options must be identified for GoT to implement in order to keep its fut ...
Refinancing Pressure and Earnings Management
... that firms that violate debt covenants experience large and persistent declines in future net corporate debt. They also find that violators (even those facing less favorable borrowing terms) rarely switch lenders, which limits their financing choices and compromises their ability to obtain credit. B ...
... that firms that violate debt covenants experience large and persistent declines in future net corporate debt. They also find that violators (even those facing less favorable borrowing terms) rarely switch lenders, which limits their financing choices and compromises their ability to obtain credit. B ...
report of the annual national debt sustainability analysis
... Bureau of Public Enterprises Central Bank of Nigeria Country Policy and Institutional Assessment Department for International Development Debt Management Departments Debt Management Office Debt Sustainability Analysis Debt Sustainability Framework Debt Relief International Economic and Financial Cri ...
... Bureau of Public Enterprises Central Bank of Nigeria Country Policy and Institutional Assessment Department for International Development Debt Management Departments Debt Management Office Debt Sustainability Analysis Debt Sustainability Framework Debt Relief International Economic and Financial Cri ...
Sovereign Debt Restructurings: Delays in Renegotiations and Risk
... former, we newly code data on the creditor committees—normally comprised of groups of 5–20 representative creditors (mostly banks)—and respective chairs who consult with the delegations from the debtor countries in a regular basis and discuss exchange proposals during restructurings. Our dataset sho ...
... former, we newly code data on the creditor committees—normally comprised of groups of 5–20 representative creditors (mostly banks)—and respective chairs who consult with the delegations from the debtor countries in a regular basis and discuss exchange proposals during restructurings. Our dataset sho ...
The Use of Debt Covenants in Public Debt: The Role of
... These Type II error costs are likely to be greater for growth firms with greater uncertainty about their future prospects, than for firms that already have the majority of their assets in place.11 Private debt may be less subject to these costs because the lender has the ability to monitor the firm ...
... These Type II error costs are likely to be greater for growth firms with greater uncertainty about their future prospects, than for firms that already have the majority of their assets in place.11 Private debt may be less subject to these costs because the lender has the ability to monitor the firm ...
Payments on Long-Term Debt As Voidable Preferences
... 547(b), a transfer2 6 of an interest of the debtor in property is a preferential transfer if it is made (1) to or for the benefit of a creditor in payment of a debt or as security for a debt, (2) on account of an antecedent debt,27 18. See infra notes 21-53 and accompanying text. 19. See infra notes ...
... 547(b), a transfer2 6 of an interest of the debtor in property is a preferential transfer if it is made (1) to or for the benefit of a creditor in payment of a debt or as security for a debt, (2) on account of an antecedent debt,27 18. See infra notes 21-53 and accompanying text. 19. See infra notes ...
The Debt-Overhang Hypothesis and the Effects on Low/High Income
... SICs. The link between investments and future growth lay with the expansion of industrial capacity and overall investments in other sectors such as construction, services and housing. The decline in investments in the 80s was followed by a decline in growth and the European situation might follow a ...
... SICs. The link between investments and future growth lay with the expansion of industrial capacity and overall investments in other sectors such as construction, services and housing. The decline in investments in the 80s was followed by a decline in growth and the European situation might follow a ...
Paris Club
The Paris Club (French: Club de Paris) is an informal group of officials from creditor countries whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by debtor countries. As debtor countries undertake reforms to stabilize and restore their macroeconomic and financial situation, Paris Club creditors provide an appropriate debt treatment. Paris Club creditors provide debt treatments to debtor countries in the form of rescheduling, which is debt relief by postponement or, in the case of concessional rescheduling, reduction in debt service obligations during a defined period (flow treatment) or as of a set date (stock treatment).The Paris Club was created gradually from 1956, when the first negotiation between Argentina and its public creditors took place in Paris. The Paris Club treats public claims, that is to say, those due by governments of debtor countries and by the private sector, guaranteed by the public sector to Paris Club members. A similar process occurs for public debt held by private creditors in the London Club, which was organized in 1970 on the model of the Paris Club is an informal group of commercial banks meet to renegotiate the debt they hold on sovereign debtors.Creditor countries meet ten times a year in Paris for Tour d'Horizon and negotiating sessions, chaired by the Director of the General Directorate of the Treasury of the French Ministry of Finance and Public Accounts.Since 1983 and until May 2014, the Paris Club has signed more than 430 agreements covering 90 debtor countries over 583 billion of dollars.