Abstract

http://ssrn.com/abstract=1786708
 
 

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Debt Specialization


Kai Li


University of British Columbia (UBC) - Sauder School of Business; China Academy of Financial Research (CAFR)

Paolo Colla


Bocconi University - Department of Finance; Bocconi University - BAFFI Center on International Markets, Money, and Regulation

Filippo Ippolito


Universitat Pompeu Fabra - Faculty of Economic and Business Sciences; Centre for Economic Policy Research (CEPR)

September 6, 2012

AFA 2012 Chicago Meetings Paper
Journal of Finance, Forthcoming

Abstract:     
This paper examines debt structure using a new and comprehensive database on types of debt employed by public U.S. firms. We find that 85% of the sample firms borrow predominantly with one type of debt, and the degree of debt specialization varies widely across different subsamples — large rated firms tend to diversify across multiple debt types, while small unrated firms specialize in fewer types. We suggest several explanations for why debt specialization takes place, and show that firms employing few types of debt have higher bankruptcy costs, are more opaque, and lack access to some segments of the debt markets.

Number of Pages in PDF File: 49

Keywords: debt specialization, debt structure, commercial paper, revolving credit facilities, term loans, senior bonds and notes, subordinate bonds and notes, capital leases

JEL Classification: G32

Accepted Paper Series





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Date posted: March 19, 2011 ; Last revised: September 7, 2012

Suggested Citation

Li, Kai and Colla, Paolo and Ippolito, Filippo, Debt Specialization (September 6, 2012). AFA 2012 Chicago Meetings Paper; Journal of Finance, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1786708 or http://dx.doi.org/10.2139/ssrn.1786708

Contact Information

Kai Li (Contact Author)
University of British Columbia (UBC) - Sauder School of Business ( email )
2053 Main Mall
Vancouver, BC V6T 1Z2
Canada
604-822-8353 (Phone)
604-822-4695 (Fax)
HOME PAGE: http://finance.sauder.ubc.ca/~kaili
China Academy of Financial Research (CAFR)
1954 Huashan Road
Shanghai P.R.China, 200030
China

Paolo Colla
Bocconi University - Department of Finance ( email )
Via Roentgen 1
Milano, MI 20136
Italy
Bocconi University - BAFFI Center on International Markets, Money, and Regulation ( email )
Milano, 20136
Italy
Filippo Ippolito
Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )
Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(+34) 93 542 2578 (Phone)
(+34) 93 542 1746 (Fax)
Centre for Economic Policy Research (CEPR) ( email )
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
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