Strategic Actions and Credit Spreads: An Empirical Investigation
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 ther...
Gespeichert in:
| Veröffentlicht in: | The Journal of finance (New York) 2007-12, Vol.62 (6), p.2633-2671 |
|---|---|
| Hauptverfasser: | , |
| Format: | Artikel |
| Sprache: | eng |
| Schlagworte: | |
| Online-Zugang: | Volltext |
| Tags: |
Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
|
| container_end_page | 2671 |
|---|---|
| container_issue | 6 |
| container_start_page | 2633 |
| container_title | The Journal of finance (New York) |
| container_volume | 62 |
| creator | DAVYDENKO, SERGEI A. STREBULAEV, ILYA A. |
| description | 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. |
| doi_str_mv | 10.1111/j.1540-6261.2007.01288.x |
| format | Article |
| fullrecord | <record><control><sourceid>jstor_proqu</sourceid><recordid>TN_cdi_proquest_miscellaneous_36796585</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><jstor_id>4622349</jstor_id><sourcerecordid>4622349</sourcerecordid><originalsourceid>FETCH-LOGICAL-a6138-59e1920fb089fd909769b2b8d6204bbd41de6cd515eadb11bf73b68a051fccb73</originalsourceid><addsrcrecordid>eNqNkUFv1DAQhS0EEkvbf8Ah4sAtYezEjs0BsVq1y1YVFbSF48hOnMohm2ztLGz_PQ6p9sAF5mJL75s3mnmEJBQyGutdm1FeQCqYoBkDKDOgTMrs8IwsjsJzsgBgLKUg2UvyKoQWpuJ8QT7ejF6P9t5VybIa3dCHRPd1svK2dmNys_NW1-F9suyT8-3OeVfpLtn0P20Y3b2e-FPyotFdsGdP7wm5uzi_XX1Kr67Xm9XyKtWC5jLlylLFoDEgVVMrUKVQhhlZCwaFMXVBayuqmlMeBxpKTVPmRkgNnDZVZcr8hLydfXd-eNjH-bh1obJdp3s77APmolSCS_5PkAHPuaIygm_-Atth7_u4BFJVlAyYKCIkZ6jyQwjeNrjzbqv9I1LAKQBscbozTnfGKQD8EwAeYuuHufWX6-zjf_fh5fXFZvpGg9ezQRvGwR8NCsFYXqgop7PswmgPR1n7HyjKvOT4_fMav335Cutbdomr_Der06NC</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>194720264</pqid></control><display><type>article</type><title>Strategic Actions and Credit Spreads: An Empirical Investigation</title><source>Jstor Complete Legacy</source><source>Wiley Online Library Journals Frontfile Complete</source><creator>DAVYDENKO, SERGEI A. ; STREBULAEV, ILYA A.</creator><creatorcontrib>DAVYDENKO, SERGEI A. ; STREBULAEV, ILYA A.</creatorcontrib><description>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.</description><identifier>ISSN: 0022-1082</identifier><identifier>EISSN: 1540-6261</identifier><identifier>DOI: 10.1111/j.1540-6261.2007.01288.x</identifier><identifier>CODEN: JLFIAN</identifier><language>eng</language><publisher>Malden, USA: Blackwell Publishing Inc</publisher><subject>Bargaining power ; Bond issues ; Bonds ; Borrowing ; Chief executive officers ; Corporate bonds ; Corporate debt ; Corporate finance ; Creditors ; Debt ; Debt management ; Debt service ; Financial engineering ; Financial leverage ; Public debt ; Risk ; Short term debt ; Spread ; Strategic behaviour ; Strategic default ; Studies ; Yield curves</subject><ispartof>The Journal of finance (New York), 2007-12, Vol.62 (6), p.2633-2671</ispartof><rights>Copyright 2007 The American Finance Association</rights><rights>2007 the American Finance Association</rights><rights>Copyright Blackwell Publishers Inc. Dec 2007</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-a6138-59e1920fb089fd909769b2b8d6204bbd41de6cd515eadb11bf73b68a051fccb73</citedby><cites>FETCH-LOGICAL-a6138-59e1920fb089fd909769b2b8d6204bbd41de6cd515eadb11bf73b68a051fccb73</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://www.jstor.org/stable/pdf/4622349$$EPDF$$P50$$Gjstor$$H</linktopdf><linktohtml>$$Uhttps://www.jstor.org/stable/4622349$$EHTML$$P50$$Gjstor$$H</linktohtml><link.rule.ids>314,776,780,799,1411,27903,27904,45553,45554,57995,58228</link.rule.ids></links><search><creatorcontrib>DAVYDENKO, SERGEI A.</creatorcontrib><creatorcontrib>STREBULAEV, ILYA A.</creatorcontrib><title>Strategic Actions and Credit Spreads: An Empirical Investigation</title><title>The Journal of finance (New York)</title><description>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.</description><subject>Bargaining power</subject><subject>Bond issues</subject><subject>Bonds</subject><subject>Borrowing</subject><subject>Chief executive officers</subject><subject>Corporate bonds</subject><subject>Corporate debt</subject><subject>Corporate finance</subject><subject>Creditors</subject><subject>Debt</subject><subject>Debt management</subject><subject>Debt service</subject><subject>Financial engineering</subject><subject>Financial leverage</subject><subject>Public debt</subject><subject>Risk</subject><subject>Short term debt</subject><subject>Spread</subject><subject>Strategic behaviour</subject><subject>Strategic default</subject><subject>Studies</subject><subject>Yield curves</subject><issn>0022-1082</issn><issn>1540-6261</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2007</creationdate><recordtype>article</recordtype><recordid>eNqNkUFv1DAQhS0EEkvbf8Ah4sAtYezEjs0BsVq1y1YVFbSF48hOnMohm2ztLGz_PQ6p9sAF5mJL75s3mnmEJBQyGutdm1FeQCqYoBkDKDOgTMrs8IwsjsJzsgBgLKUg2UvyKoQWpuJ8QT7ejF6P9t5VybIa3dCHRPd1svK2dmNys_NW1-F9suyT8-3OeVfpLtn0P20Y3b2e-FPyotFdsGdP7wm5uzi_XX1Kr67Xm9XyKtWC5jLlylLFoDEgVVMrUKVQhhlZCwaFMXVBayuqmlMeBxpKTVPmRkgNnDZVZcr8hLydfXd-eNjH-bh1obJdp3s77APmolSCS_5PkAHPuaIygm_-Atth7_u4BFJVlAyYKCIkZ6jyQwjeNrjzbqv9I1LAKQBscbozTnfGKQD8EwAeYuuHufWX6-zjf_fh5fXFZvpGg9ezQRvGwR8NCsFYXqgop7PswmgPR1n7HyjKvOT4_fMav335Cutbdomr_Der06NC</recordid><startdate>200712</startdate><enddate>200712</enddate><creator>DAVYDENKO, SERGEI A.</creator><creator>STREBULAEV, ILYA A.</creator><general>Blackwell Publishing Inc</general><general>Blackwell Publishers</general><general>Blackwell Publishers Inc</general><scope>BSCLL</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope><scope>7U1</scope><scope>7U2</scope><scope>C1K</scope></search><sort><creationdate>200712</creationdate><title>Strategic Actions and Credit Spreads: An Empirical Investigation</title><author>DAVYDENKO, SERGEI A. ; STREBULAEV, ILYA A.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-a6138-59e1920fb089fd909769b2b8d6204bbd41de6cd515eadb11bf73b68a051fccb73</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2007</creationdate><topic>Bargaining power</topic><topic>Bond issues</topic><topic>Bonds</topic><topic>Borrowing</topic><topic>Chief executive officers</topic><topic>Corporate bonds</topic><topic>Corporate debt</topic><topic>Corporate finance</topic><topic>Creditors</topic><topic>Debt</topic><topic>Debt management</topic><topic>Debt service</topic><topic>Financial engineering</topic><topic>Financial leverage</topic><topic>Public debt</topic><topic>Risk</topic><topic>Short term debt</topic><topic>Spread</topic><topic>Strategic behaviour</topic><topic>Strategic default</topic><topic>Studies</topic><topic>Yield curves</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>DAVYDENKO, SERGEI A.</creatorcontrib><creatorcontrib>STREBULAEV, ILYA A.</creatorcontrib><collection>Istex</collection><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><collection>Risk Abstracts</collection><collection>Safety Science and Risk</collection><collection>Environmental Sciences and Pollution Management</collection><jtitle>The Journal of finance (New York)</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>DAVYDENKO, SERGEI A.</au><au>STREBULAEV, ILYA A.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Strategic Actions and Credit Spreads: An Empirical Investigation</atitle><jtitle>The Journal of finance (New York)</jtitle><date>2007-12</date><risdate>2007</risdate><volume>62</volume><issue>6</issue><spage>2633</spage><epage>2671</epage><pages>2633-2671</pages><issn>0022-1082</issn><eissn>1540-6261</eissn><coden>JLFIAN</coden><abstract>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.</abstract><cop>Malden, USA</cop><pub>Blackwell Publishing Inc</pub><doi>10.1111/j.1540-6261.2007.01288.x</doi><tpages>39</tpages></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 0022-1082 |
| ispartof | The Journal of finance (New York), 2007-12, Vol.62 (6), p.2633-2671 |
| issn | 0022-1082 1540-6261 |
| language | eng |
| recordid | cdi_proquest_miscellaneous_36796585 |
| source | Jstor Complete Legacy; Wiley Online Library Journals Frontfile Complete |
| subjects | Bargaining power Bond issues Bonds Borrowing Chief executive officers Corporate bonds Corporate debt Corporate finance Creditors Debt Debt management Debt service Financial engineering Financial leverage Public debt Risk Short term debt Spread Strategic behaviour Strategic default Studies Yield curves |
| title | Strategic Actions and Credit Spreads: An Empirical Investigation |
| url | https://sfx.bib-bvb.de/sfx_tum?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2025-01-27T17%3A12%3A30IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-jstor_proqu&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=Strategic%20Actions%20and%20Credit%20Spreads:%20An%20Empirical%20Investigation&rft.jtitle=The%20Journal%20of%20finance%20(New%20York)&rft.au=DAVYDENKO,%20SERGEI%20A.&rft.date=2007-12&rft.volume=62&rft.issue=6&rft.spage=2633&rft.epage=2671&rft.pages=2633-2671&rft.issn=0022-1082&rft.eissn=1540-6261&rft.coden=JLFIAN&rft_id=info:doi/10.1111/j.1540-6261.2007.01288.x&rft_dat=%3Cjstor_proqu%3E4622349%3C/jstor_proqu%3E%3Curl%3E%3C/url%3E&disable_directlink=true&sfx.directlink=off&sfx.report_link=0&rft_id=info:oai/&rft_pqid=194720264&rft_id=info:pmid/&rft_jstor_id=4622349&rfr_iscdi=true |