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http://ssrn.com/abstract=1097577
 
 

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Capital Structure and Debt Structure


Joshua D. Rauh


Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Amir Sufi


University of Chicago - Booth School of Business; NBER

February 17, 2010

AFA 2009 San Francisco Meetings Paper
EFA 2008 Athens Meetings Paper

Abstract:     
Using a novel data set that records individual debt issues on the balance sheets of public firms, we demonstrate that traditional capital structure studies that ignore debt heterogeneity miss substantial capital structure variation. Relative to high credit quality firms, low credit quality firms are more likely to have a multi-tiered capital structure consisting of both secured bank debt with tight covenants and subordinated non-bank debt with loose covenants. We discuss the extent to which these findings are consistent with existing theoretical models of debt structure in which firms simultaneously use multiple debt types to reduce incentive conflicts.

Number of Pages in PDF File: 56

Keywords: debt structure, bank debt, monitoring, credit ratings, private placements, commercial paper, convertible debt

JEL Classification: G32, G33, G21, M41

working papers series


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Date posted: March 19, 2008 ; Last revised: February 18, 2010

Suggested Citation

Rauh, Joshua D. and Sufi, Amir, Capital Structure and Debt Structure (February 17, 2010). ; AFA 2009 San Francisco Meetings Paper; EFA 2008 Athens Meetings Paper. Available at SSRN: http://ssrn.com/abstract=1097577 or http://dx.doi.org/10.2139/ssrn.1097577

Contact Information

Joshua D. Rauh (Contact Author)
Stanford Graduate School of Business ( email )
518 Memorial Way
Stanford, CA 94305-5015
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Amir Sufi
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
NBER
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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