Article (Journal/Review)
The effects of corporate bond granularity
Fecha
2016-02Registro en:
0378-4266
10.1016/j.jbankfin.2015.11.001
000369463800002
Autor
Norden, Lars
Roosenboom, Peter
Wang, Teng
Institución
Resumen
We investigate whether and how firms manage their rollover risk by having a dispersed bond maturity structure (granularity). Granularity can be achieved or maintained by frequently issuing sets of bonds with different maturities. We find that firms with higher granularity have higher availability of financing, lower cost of financing, lower financial constraints and lower stock return volatility. The effects are stronger for firms that face higher rollover risk. The evidence suggests that spreading out bond maturities is an effective corporate policy to manage rollover risk. (C) 2015 Elsevier B.V. All rights reserved.