The Determinants of the Maturity of Corporate Debt Issues

J. OF FINANCE, Vol. 51 No. 5, December 1996

Posted: 12 Mar 1997

See all articles by José Correia Guedes

José Correia Guedes

Catholic University of Portugal (UCP) - Faculty of Economic Science and Business Studies

Tim C. Opler

Credit Suisse First Boston

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Abstract

We document the determinants of the term to maturity of 7,369 bonds and notes issued between 1982 and 1993. Our main finding is that large firms with investment grade credit ratings typically borrow at the short end and at the long end of the maturity spectrum, while firms with speculative grade credit ratings typically borrow in the middle of the maturity spectrum. This pattern is consistent with the theory that risky firms do not issue short-term debt in order to avoid inefficient liquidation, but are screened out of the long-term debt market because of the prospect of risky asset substitution.

JEL Classification: G39

Suggested Citation

Correia Guedes, José Filipe and Opler, Tim C., The Determinants of the Maturity of Corporate Debt Issues. J. OF FINANCE, Vol. 51 No. 5, December 1996, Available at SSRN: https://ssrn.com/abstract=8176

José Filipe Correia Guedes

Catholic University of Portugal (UCP) - Faculty of Economic Science and Business Studies ( email )

Lisboa, 1600
Portugal

Tim C. Opler (Contact Author)

Credit Suisse First Boston ( email )

11 Madison Avenue
Investment Banking Div., 23rd Flr
New York, NY 10010
United States
(212) 328-5313 (Phone)
(212) 448-3410 (Fax)

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