Real Assets, Collateral and the Limits of Debt Capacity
| Autor: | Timothy J. Riddiough, Antonio S. Mello, Erasmo Giambona |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Finance
Economics and Econometrics Unsecured debt 050208 finance Collateral business.industry media_common.quotation_subject 05 social sciences Monetary economics Accounting Debt 0502 economics and business Economics Bond market Balance sheet Debt ratio Internal debt 050207 economics Second lien loan business media_common |
| Zdroj: | Real Estate Economics. 46:836-886 |
| ISSN: | 1080-8620 |
| DOI: | 10.1111/1540-6229.12207 |
| Popis: | We develop a model in which better quality firms separate themselves by issuing unsecured debt and committing to maintain a strong balance sheet, something lower quality firms find too costly to do. Lower quality firms, in contrast, pledge real assets in secured debt transactions. However, during turbulent financial periods, pooling occurs in the secured debt market, which raises the average quality of firms in that market. We use the 1998 Russian crisis together with the role played by Fannie Mae and Freddie Mac for apartment REITs to highlight the relation between financing outcomes and firm type. This article is protected by copyright. All rights reserved |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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