Bond Restructuring and Moral Hazard [electronic resource] : Are Collective Action Clauses Costly? Becker, Törbjörn I..
- Washington, D.C. : International Monetary Fund, 2001.
- IMF eLibrary
IMF Working Papers; Working Paper No. 01/92.
IMF Working Papers; Working Paper No. 01/92
- Government document
1 online resource (41 p.)
- Local subjects:
- Asset Pricing.
Bond market access.
Collective action clauses.
Dual currency bonds.
Emerging market bond.
Emerging market bonds.
Fixed rate bonds.
International bond issues.
International bond markets.
International capital markets.
International financial architecture.
International Financial Markets.
International Lending and Debt Problems.
Supply of bonds.
Valuation of bonds.
Yields on bonds.
Korea, Republic of.
- Many official groups have endorsed the wider use by emerging market borrowers of contract clauses which allow for a qualified majority of bondholders to restructure repayment terms in the event of financial distress. Some have argued that such clauses will be associated with moral hazard and increased borrowing costs. This paper addresses this question empirically using primary and secondary market yields and finds no evidence that the presence of collective action clauses increases yields for either higher- or lower-rated issuers. By implication, the perceived benefits from easier restructuring are at least as large as any costs from increased moral hazard.
- Description based on print version record.
- Becker, Törbjörn I.
Richards, Anthony J.
- Other format:
- Print Version:
- Publisher Number:
- Access Restriction:
- Restricted for use by site license.
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