Asset Maturity, Debt Covenants, and Debt Maturity Choice

The existing research on debt‐maturity under asymmetric information has focused on the impact of differential information regarding asset quality on the debt maturity decision. This research has generally indicated the optimality of short‐term debt financing as a vehicle of mitigating the adverse selection problem. In this paper, I consider the impact of information asymmetry regarding the maturity structure of cash flows on the debt maturity decision. In this context, long‐term debt is generally the form of debt financing most effective in alleviating the adverse selection problem. I also show that costs of adverse selection may induce some mismatching of debt maturity and asset maturity in the presence of significant transaction costs.     

Industry Structure and Corporate Debt Maturity

We examine how industry competition affects firms’ choice of short‐term debt. We find that the percentage of short‐term debt is positively related to industry concentration at low levels of concentration, and inversely related to industry concentration at higher levels of concentration. This nonlinear relation is stronger in industries where firms are either more homogeneous or compete more aggressively. Moreover, we find that firms with shorter‐maturity debt are less aggressive than their rivals in the product market. The overall evidence suggests that although financial contracts alleviate agency problems, they exacerbate the risk of predation.     

Determinants of Bank Debt in a Continental Financial System: Evidence from Spanish Companies

We test hypotheses about the structure of corporate debt ownership and the use of bank debt by firms in a civil‐law country, Spain. We focus on bank debt effects in the presence of information asymmetries and agency costs, and on efficient versus inefficient firm liquidation. We find that the relation between growth opportunities and bank financing is not as strong as the one found in common‐law countries, that there is a positive relation between firm size and the proportion of bank debt used, and that firms closer to bankruptcy and highly leveraged are more likely to use bank debt.     

The Determinants of Debt Maturity at Issuance: A System-Based Model

We examine the determinants of corporate debt maturity while taking into account the interdependent relation between maturity and leverage. We do this by estimating a simultaneous-equations model on debt maturity and leverage for a sample of bond-issuing firms. To compare with previous studies, we also estimate a single-equation model on debt maturity using OLS. We define debt maturity as either the maturity of bonds at issuance (incremental approach), or the percentage of a firm's total debt that matures in more than three years (balance-sheet approach). Corroborating the findings of many previous studies, our single-equation OLS results support the underinvestment hypothesis purporting that firms with greater growth opportunities have shorter-term debt. However, under the simultaneous-equations model, the negative relation between a firm's debt maturity and its growth opportunities ceases to hold. Instead, it is the leverage decision that is influenced by growth opportunities. This suggests that existing models may overestimate the effect of growth opportunities on debt maturity.     

Financial Reporting Quality,Debt Maturity,and the Cost of Debt: Evidence from China

This paper investigates the influence of different financing channels—bond issuance or bank loans—as well as debt maturity and the quality of financial reporting on the cost of debt in China. The authors find that conservative accounting is an important characteristic of high-quality financial reporting that can reduce the cost of longer maturity debt such as bank loans and bonds. Even state-owned enterprises, which have fewer financial constraints than non-state-owned enterprises, benefit from accounting conservatism's ability to reduce financial costs. Moreover, the findings indicate that bond investors are concerned about the issuer's fundamentals, while banks are more likely to focus on the operation and bankruptcy risk of borrowers.     

Determinants of Capital Structure and Adjustment to Long Run Target: Evidence From UK Company Panel Data

This paper examines the empirical determinants of borrowing decisions of firms and the role of adjustment process. A partial adjustment model is estimated by GMM estimation procedure using data for an unbalanced panel of 390 UK firms over the period of 1984–1996. Our results suggest that firms have long-term target borrowing ratios and they adjust to their target ratios relatively fast, which might suggest that the costs of being away from their target ratios are significant. The results also provide support for positive impact of size, and negative effects of growth opportunities, liquidity, profitability of firms and non-debt tax shields on the borrowing decisions of companies.     

公司债务期限结构问题研究综述

本文对国内外公司债务期限结构间题的理论和经验研究进行了全面、系统的回顾，包括两方面内容：一是公司债务期限结构与公司价值之间的关系，二是公司债务期限结构的影响因素。本文评价了现有文献存在的问题和不足之处，为中国上市公司债务期限结构问题研究提供了依据和方向。     

债务期限结构和区域因素——来自中国上市公司的经验证据

本文采用参数和非参数检验方法经验检查中国上市公司注册地所在区域因素与公司债务期限结构之间关系。研究发现：（1）不同区域之间的债务期限结构存在系统性差异：（2）区域因素能解释公司债务期限结构3％左右的变异；（3）中部地区的债务期限显著高于东部、西部地区的债务期限；（4）市场化程度高、经济发达的地区具有相对低的债务期限。     

The Determinants of Debt Maturity: The Case of Bank Financing in Singapore

This study presents important international evidence by examining the determinants of debt maturity of listed firms in Singapore, a major financial center in Asia. We focus on bank debt because it is the principal source of financing for most Singapore firms. We find that consistent with the contracting-cost hypothesis, firms with greater growth opportunities rely more heavily on short-term bank debt whereas larger firms are more likely to use long-term bank debt. In contrast, we find no strong support for either the tax or signaling hypotheses.     

非标意见与债务融资——基于银行借款和债务期限结构的经验证据

理论上,年报被出具非标意见会降低企业的债务融资能力。但本文发现非标意见对企业新增银行借款和债务期限结构没有显著负面影响,不支持理论预期。我们认为,在中国,银行是一个并非完全以利润最大化为目标的独立市场主体,他们会为了地方社会稳定和经济发展向企业提供贷款;另外,企业有政府的隐性支持,银行不需要太关注企业的偿债风险。因此,虽然非标意见传递出会计信息质量低或未来经营风险高等问题,但它对银行借款的影响相当有限。本文的研究有助于我们理解中国上市公司会计造假盛行、非标意见比例过高的现象。     

中国上市公司债务期限结构特征的实证检验

本文采用描述性统计、混合最小二乘、参数和非参数检验等方法对中国上市公司的债务期限结构特征进行了系统分析。研究发现，中国上市公司的债务期限相对较低，中国受管制行业的债务期限相对高于其他行业，不同行业和不同地区之间的债务期限存在显著性差异．这些差异大部分归属于行业差异和地区差异而不是年度差异。总的说来，债务期限9．53％的变异能由行业类别加以解释，4．15％的变异能由地区虚拟变量加以解释。     

Debt Maturity,Credit Risk,and Information Asymmetry: The Case of Municipal Bonds

Using a system of equations approach, this paper empirically tests the impact of credit quality, asset maturity, and other issuer and issue characteristics on the maturity of municipal bonds. We find that under conditions of lower information asymmetry that prevails in the municipal sector, higher‐rated bonds have longer maturities than low‐rated bonds. This result differs from that observed in the corporate sector. Overall, our results support the asset maturity hypothesis. In addition, our analysis finds that fundamentals matter. Issue features that provide additional protection or convenience to the investor tend to increase debt maturity.     

The Original Maturity of Corporate Bonds: The Influence of Credit Rating,Asset Maturity,Security, and Macroeconomic Conditions

We examine the determinants of the new issue maturity of corporate bonds. As credit rating decreases, new bond issues have longer maturities, but substantial variation in maturity within each rating class remains. We seek to explain the variation of new issue maturity within credit classes. We find that asset maturity, security covenants, and macroeconomic conditions influence the new issue maturity of bonds within rating categories.     

Internal Capital Markets and Capital Structure: Bank Versus Internal Debt

We argue that domestic business groups are able to actively optimise the internal/external debt mix across their subsidiaries. Novel to the literature, we use bi‐level data (i.e. data from both individual subsidiary financial statements and consolidated group level financial statements) to model the bank and internal debt concentration of non‐financial Belgian private business group affiliates. As a benchmark, we construct a size and industry matched sample of non‐group affiliated (stand‐alone) companies. We find support for a pecking order of internal debt over bank debt at the subsidiary level which leads to a substantially lower bank debt concentration for group affiliates as compared to stand‐alone companies. The internal debt concentration of a subsidiary is mainly driven by the characteristics of the group's internal capital market. The larger its available resources, the more intra‐group debt is used while bank debt financing at the subsidiary level decreases. However, as the group's overall debt level mounts, groups increasingly locate bank borrowing in subsidiaries with low costs of external financing (i.e. large subsidiaries with important collateral assets) to limit moral hazard and dissipative costs. Overall, our results are consistent with the existence of a complex group wide optimisation process of financing costs.     

The Role of Investment,Financing and Dividend Decisions in Explaining Corporate Ownership Structure: Empirical Evidence from Spain

This paper analyses the determinants of ownership structure by focusing on the role played by investment, financing and dividend decisions. The use of the Generalised Method of Moments allows us to provide new evidence on this important corporate governance topic, since it controls for the endogeneity problem. Our most relevant findings show that: i) increases in debt lead insiders to limit the risk they bear by reducing their holdings; ii) monitoring by large outside owners substitutes for the disciplinary role of debt; and iii) both inside and outside owners are encouraged to increase their stakes in the firm in view of higher dividends. Our results hold after controlling for equity issues and share repurchases.     

The Dependency of the Banks' Assets and Liabilities: Evidence from Germany

Two decades of developments in risk‐transfer instruments may have fundamentally changed the extent to which banks practice on‐balance sheet term and liquidity transformation. These changes should be deliberated in on‐balance sheet asset‐liability dependencies. By using correlation analyses, we investigate asset‐liability dependency for all three sectors of German universal banks from 1994 to 2007 and find that it declined over our sample period. We also investigate whether asset‐liability dependency varies systematically with a bank's affinity for using risk‐transfer instruments, regulatory capital, and profitability and document several differences between the three sectors of German universal banks.     

The Impact of Liquidity on Debt Maturity After a Financial Crisis: Evidence from the Gulf Cooperation Council Region

This article contributes to the existent literature on corporate debt maturity by studying a new channel through which firms may mitigate the effects of a major economic downturn such as the 2008 global financial crisis. More specifically, using a sample of 208 listed firms in the Gulf Cooperation Council (GCC) region, we find that an increase in firms’ current ratios after the crisis is associated with an increase in long-term financing. We also find that a financially constrained firm can still access long-term financing if its current ratio after the crisis is beyond a specific threshold. Additionally, we highlight the differences in the typical drivers of debt structure between GCC countries and industries.     

The Capital Structure of Swiss Companies: an Empirical Analysis Using Dynamic Panel Data

In this paper, we analyse the determinants of the capital structure for a panel of 104 Swiss companies listed in the Swiss stock exchange. Dynamic tests are performed for the period 1991–2000. It is found that the size of companies and the importance of tangible assets are positively related to leverage, while growth and profitability are negatively associated with leverage. The sign of these relations suggest that both the pecking order and trade‐off theories are at work in explaining the capital structure of Swiss companies, although more evidence exists to validate the latter theory. Our analysis also shows that Swiss firms adjust toward a target debt ratio, but the adjustment process is much slower than in most other countries. It is argued that reasons for this can be found in the institutional context.     

An Integrated Model of Debt Issuance, Refunding, and Maturity

We integrate previous work in this area and develop a multiperiod model that simultaneously determines bond refunding, bond issuance, maturity structure, cash holdings, and bank borrowing policies. The focus here is on providing the required debt funds in the most cost efficient fashion. A strength of the model is that it allows for time varying interest costs, transaction costs, issuance costs, and refunding costs to be firm specific. The output of the model lays out the optimal financing decisions for each time interval that minimize the total discounted cost of providing the funds that match the requisite funds. By limiting the surplus funds available, the model minimizes the management incentive to over invest and thereby reduces the agency costs. The model has economic implications for the financing decisions and the firm's default risk, growth opportunities, riskiness of cash flows, and firm size. JEL Classification: G30     

Relationship lending,hierarchical distance and credit tightening: Evidence from the financial crisis

This paper examines the firms’ credit availability during the 2007–2009 financial crisis using a dataset of 5331 bank–firm relationships provided by borrowers’ credit folders of three Italian banks. It aims to test whether a strong lender–borrower relationship can produce less credit rationing for borrowing firms even during a credit crunch period. The results show that exclusivity of the relationship can mitigate the firm credit rationing. We also verify the influence of lending organizational structure during crisis. A new measure of distance in lending technologies has been introduced: the hierarchical distance calculated as the distance between the branch that originates the loan and the location of the hierarchical level responsible for financing decision. Our findings document a negative impact of distance on credit availability, consistent with the idea that proximity facilitates the transmission of soft information.