Debt Maturity And The Use Of Short Term Debt
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Debt Maturity And The Use Of Short Term Debt
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Author : Sophia Chen
language : en
Publisher: International Monetary Fund
Release Date : 2019-02-05
Debt Maturity And The Use Of Short Term Debt written by Sophia Chen and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-02-05 with Business & Economics categories.
The maturity structure of debt can have financial and real consequences. Short-term debt exposes borrowers to rollover risk (where the terms of financing are renegotiated to the detriment of the borrower) and is associated with financial crises. Moreover, debt maturity can have an impact on the ability of firms to undertake long-term productive investments and, as a result, affect economic activity. The aim of this paper is to examine the evolution and determinants of debt maturity and to characterize differences across countries.
The Maturity Structure Of Debt
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Author : Fabio Schiantarelli
language : en
Publisher: World Bank Publications
Release Date : 1997
The Maturity Structure Of Debt written by Fabio Schiantarelli and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997 with Corporate debt categories.
The Maturity Structure Of Debt Determinants And Effects On Firms Performance Evidence From The United Kingdom And Italy
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Author : Fabio Schiantarelli
language : en
Publisher:
Release Date : 1999
The Maturity Structure Of Debt Determinants And Effects On Firms Performance Evidence From The United Kingdom And Italy written by Fabio Schiantarelli and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999 with categories.
January 1997 Firms tend to match assets with liabilities, and more profitable firms have more long-term debt. Long-term debt has a positive effect on firms' performance, but this is not true when a large fraction of that debt is subsidized. The authors empirically investigate the determinants and consequences of the maturity structure of debt, using data from a panel of UK and Italian firms. They find that in choosing a maturity structure for debt, firms tend to match assets and liabilities, as both conventional wisdom and some recent theoretical models suggest. They conclude that more profitable firms (as measured by the ratio of cash flow to capital) tend to have more long-term debt. This finding is consistent with the dominant role played by firms' fear of liquidation and loss of control associated with short-term debt. It may also reflect the willingness of financial markets to provide long-term finance only to quality firms. The data do not support the hypothesis that short-term debt, through better monitoring and control, boosts efficiency and growth -rather, the opposite can be concluded. In both countries, the data suggest a positive relationship between initial debt maturity and the firms' subsequent medium-term performance (i.e., profitability and growth in real sales). In both countries total factor productivity (TFP) depends positively on the length of debt maturity when the maturity variable is entered both contemporaneously and lagged. But in Italy the positive effect of the length of maturity on productivity is substantially reduced or even reversed when the proportion of subsidized credit increases. The authors document the relationship between firms' characteristics and their choice of shorter or long-term debt by estimating a maturity equation and interpreting the results in light of insights from theoretical literature, and by analyzing the effects of maturity on firms' later performance in terms of profitability, growth, and productivity; assess how TFP depends on the degree of leverage and the proportion of longer and shorter-term debt; and analyze the relationship between firms' debt maturity and investment. This paper--a product of the Finance and Private Sector Development Division, Policy Research Department--is part of a larger effort in the department to study the effects of financial structure on economic performance. The study was funded by the Bank's Research Support Budget under the research project Term Finance: Theory and Evidence (RPO 679-62).
Debt Maturity A Survey
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Author : S. Abraham Ravid
language : en
Publisher:
Release Date : 1996
Debt Maturity A Survey written by S. Abraham Ravid and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1996 with Corporate debt categories.
Acces To Long Term Debt And Effects On Firms Performance
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Author : Fidel Jaramillo
language : en
Publisher: World Bank Publications
Release Date : 1997
Acces To Long Term Debt And Effects On Firms Performance written by Fidel Jaramillo and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997 with Business enterprises categories.
Project Flexibility Agency And Competition
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Author : Michael J. Brennan
language : en
Publisher: Oxford University Press, USA
Release Date : 1999
Project Flexibility Agency And Competition written by Michael J. Brennan and has been published by Oxford University Press, USA this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999 with Business & Economics categories.
While most approaches to capital budgeting have used discounted cash flow valuation techniques, recent attention has been given to the valuation of "real options" to look at capital budgeting decisions and project management. Real options are a measure of the value of managerial flexibility and strategic value in capital investment. Because this topic is important but not yet covered adequately, "Innovation, Infrastructure and Strategic Options" fills a major gap in the market. This text deals with issues of R & D and technology options, investments involving learning, infrastructure, competition, strategy, and growth options.
Debt Maturity And Firm Performance
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Author : Fabio Schiantarelli
language : en
Publisher: World Bank Publications
Release Date : 1997
Debt Maturity And Firm Performance written by Fabio Schiantarelli and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997 with Mercado de capitales - India categories.
Debt Maturity
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Author : Mr.Jun Il Kim
language : en
Publisher: International Monetary Fund
Release Date : 2015-12-09
Debt Maturity written by Mr.Jun Il Kim and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-12-09 with Business & Economics categories.
This paper examines how debt maturity affects the debt limit, defined as the maximum amount of debt a government can afford without defaulting. We develop a model where investors are risk neutral, the primary balance is stochastic but exogenous, and default occurs solely due to the government’s inability to pay. We find that debt limit is higher for long-term debt. Underlying this finding is the intrinsic advantage of long-term debt to price in future upside potential in fiscal outcomes in its current price. Such advantage makes long-term debt effectively cheaper than short-term debt at the margin, and leads to a higher debt limit. Simulation results suggest that the effect of debt maturity on debt limit could be substantial—particularly, if fiscal outcomes are subject to large uncertainty.
International Loans Bonds Guarantees Legal Opinions
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Author : Philip R. Wood
language : en
Publisher: Sweet & Maxwell
Release Date : 2007
International Loans Bonds Guarantees Legal Opinions written by Philip R. Wood and has been published by Sweet & Maxwell this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with Bail categories.
This volume provides coverage of syndicated bank credit agreements and loan transfers, international bond issues including equity-linked bonds, note programs and high yield notes, bondholder trustees and collective action clauses and more.
Credit Information Quality And Corporate Debt Maturity
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Author : Marco Sorge
language : en
Publisher: World Bank Publications
Release Date : 2007
Credit Information Quality And Corporate Debt Maturity written by Marco Sorge and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with Access to Finance categories.
This paper provides new theoretical and empirical evidence suggesting that the quality of credit information may be a key element in explaining the maturity structure of corporate debt around the world. In markets with poor credit information and hence a high degree of uncertainty about borrower quality, the authors find suboptimal equilibria in which short-term contracts are preferred either as a hedge against uncertainty to limit losses in bad states (in the symmetric information case) or as a screening device to learn about borrower credit quality in the course of a repeated lending relationship (in the asymmetric information case). The results of the model are supported by the econometric analysis of panel data from both industrial and developing economies. The authors find that countries with better quality of credit information (for example, as a result of improvements in credit reporting systems or accounting standards) are characterized by a higher share of long-term debt as a proportion of total corporate debt ceteris paribus. The findings suggest that promoting institutions and policies to improve the quality of credit information is an important prerequisite for increasing access of firms to long-term finance.