Distressed debt restructuring in the presence of credit default swaps
File(s)
Accepted version
Author(s)
Cathcart, L
Bedendo, M
El-Jahel, L
Type
Journal Article
Abstract
The availability of credit insurance via credit default swaps has been closely associated with the emergence of empty creditors. We empirically investigate this issue by looking at the debt restructurings (distressed exchanges and bankruptcy filings) of rated, nonfinancial U.S. companies over the period January 2007–June 2011. Using different proxies for the existence of insured creditors, we do not find evidence that the access to credit insurance favors bankruptcy over a debt workout. However, we document higher recovery prices following a distressed exchange in firms where empty creditors are more likely to emerge.
Date Issued
2016-01-19
Date Acceptance
2014-12-18
Citation
Journal of Money, Credit and Banking, 2016, 48 (1), pp.165-201
ISSN
1538-4616
Publisher
Wiley
Start Page
165
End Page
201
Journal / Book Title
Journal of Money, Credit and Banking
Volume
48
Issue
1
Copyright Statement
© 2016 The Authors. Journal of Money, Credit and Banking published by Wiley Periodicals, Inc. on behalf of Ohio State University
This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.
This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.
Identifier
https://onlinelibrary.wiley.com/doi/full/10.1111/jmcb.12294
Subjects
Social Sciences
Business, Finance
Economics
Business & Economics
credit default swaps
empty creditors
debt restructuring
FINANCIAL DISTRESS
EQUITY
REORGANIZATION
INVESTMENT
CHAPTER-11
BANKRUPTCY
RESOLUTION
EXCHANGES
WORKOUTS
FIRMS
Economics
1401 Economic Theory
1402 Applied Economics
1502 Banking, Finance and Investment
Publication Status
Published
Coverage Spatial
Nevada
Date Publish Online
2016-01-19