The rise of covenant-lite bond contracting
| dc.contributor.author | Gietzmann, M. | |
| dc.contributor.author | Isidro, H. | |
| dc.contributor.author | Raonic, I. | |
| dc.date.accessioned | 2021-02-11T12:52:04Z | |
| dc.date.available | 2021-02-11T12:52:04Z | |
| dc.date.issued | 2023 | |
| dc.date.updated | 2023-09-04T16:53:47Z | |
| dc.description.abstract | We investigate the trading and yield effects of covenant-lite (cov-lite) high-yield bond contracts, which have a restricted (lite) set of covenants. The excluded covenants often are those that use accounting performance measures. Although much research has focused on the potential benefits of accounting as a basis for debt contracting, little is known about settings where it may be optimal to exclude accounting performance statistics from public debt contracts. We find that cov-lite high-yield bonds have a higher trading turnover and lower yield spreads. Our findings provide empirical support for theory, which predicts, for optimal bond covenant design, that a trade-off between improving trading ease versus enhanced investor protection needs to be managed. These results enhance our understanding of the limits of accounting’s role in (bond) contracting design. | eng |
| dc.description.version | info:eu-repo/semantics/acceptedVersion | |
| dc.identifier.citation | Gietzmann, M., Isidro, H., & Raonic, I. (2023). The rise of covenant-lite bond contracting. Journal of Accounting, Auditing and Finance, 38(3), 483-509. https://doi.org/10.1177/0148558X20987384 | |
| dc.identifier.doi | 10.1177/0148558X20987384 | |
| dc.identifier.issn | 0148-558X | |
| dc.identifier.uri | http://hdl.handle.net/10071/21988 | |
| dc.journal | Journal of Accounting, Auditing and Finance | |
| dc.language.iso | eng | |
| dc.number | 3 | |
| dc.pagination | 483 - 509 | |
| dc.peerreviewed | yes | |
| dc.publisher | Sage | |
| dc.relation | info:eu-repo/grantAgreement/FCT/6817 - DCRRNI ID/UID%2FGES%2F00315%2F2019/PT | |
| dc.relation | info:eu-repo/grantAgreement/FCT/6817 - DCRRNI ID/UIDB%2F00315%2F2020/PT | |
| dc.rights | open access | |
| dc.subject | Covenants | eng |
| dc.subject | Debt | eng |
| dc.subject | Risk | eng |
| dc.subject | Turnover | eng |
| dc.subject | Trading volume | eng |
| dc.subject | Control rights | eng |
| dc.subject.fos | Domínio/Área Científica::Ciências Sociais::Economia e Gestão | por |
| dc.title | The rise of covenant-lite bond contracting | eng |
| dc.type | article | |
| dc.volume | 38 | |
| degois.publication.firstPage | 1 | |
| degois.publication.lastPage | 27 | |
| degois.publication.title | The rise of covenant-lite bond contracting | eng |
| dspace.entity.type | Publication | en |
| iscte.alternateIdentifiers.scopus | 2-s2.0-85100006108 | |
| iscte.alternateIdentifiers.wos | WOS:WOS:000618469800001 | |
| iscte.identifier.ciencia | https://ciencia.iscte-iul.pt/id/ci-pub-79165 | |
| iscte.journal | Journal of Accounting, Auditing and Finance | |
| iscte.subject.ods | Educação de qualidade | por |
| iscte.subject.ods | Indústria, inovação e infraestruturas | por |
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