Download or read book Bond Covenants and the Valuation of Risky Debt written by Michael J. Brennan and published by . This book was released on 1989 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Risky Debt Jump Processes and Safety Covenants Classic Reprint written by Scott P. Mason and published by Forgotten Books. This book was released on 2018-02-22 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: Excerpt from Risky Debt, Jump Processes and Safety Covenants Black and Cox [2] analyze the effects of certain bond indenture provi sions on the valuation of corporate securities. One specific problem addressed in their paper is the valuation of a risky discount bond in the presence of a safety covenant. A safety covenant is a provision of a bond indenture stipulating that if the value of the firm falls to or below a specified level then the bondholders are entitled to some immediate settle ment of their claim on the firm. The analysis of Black and Cox [2] assumes that the dynamics for the value of the firm can be described by a diffusion process. They suggest that the value of the debt may be altered if the value of the firm follows a jump process since it would then be possible for the value of the firm to reach points below the barrier specified by the safety covenant without first passing through it. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.

Download or read book Long term Debt Value Bond Covenants and Optimal Capital Structure written by Hayne E. Leland and published by . This book was released on 1993 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Modern Role of Bond Covenants written by Ileen Malitz and published by Wiley. This book was released on 1991-01-15 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: Bond covenants-designed to control conflicts of interest between shareholders and bondholders-are important because lack of adequate protection can erode bondholder value. This monograph investigates whether existing covenants are adequate or whether they have lost value as a result of factors that assumed prominence during the leveraged-buyout era.

Download or read book Corporate Debt Value Bond Covenants and Optimal Capital Structure written by Hayne E. Leland and published by . This book was released on 1994 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Managerial Entrenchment and the Choice of Debt Financing written by Mr.Amadou N. R. Sy and published by International Monetary Fund. This book was released on 1999-07-01 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper analyzes the choice between public and private debt by an entrenched manager. The model shows that when the firm’s credit risk is low, management issues public bonds because of the value gains from increased flexibility rather than reduced restrictions and monitoring. In fact, management’s expected private gains decrease as initial private debt restrictions are selectively relaxed. In contrast, when credit risk is high, management issues private debt because of the value gains and private benefits from renegotiating more stringent restrictions. When the maturity of private debt is shortened, however, privately and publicly placed bonds can be preferred to bank debt.

Download or read book World Scientific Reference On Contingent Claims Analysis In Corporate Finance In 4 Volumes written by Michel Crouhy and published by World Scientific. This book was released on 2019-01-21 with total page 2039 pages. Available in PDF, EPUB and Kindle. Book excerpt: Black and Scholes (1973) and Merton (1973, 1974) (hereafter referred to as BSM) introduced the contingent claim approach (CCA) to the valuation of corporate debt and equity. The BSM modeling framework is also named the 'structural' approach to risky debt valuation. The CCA considers all stakeholders of the corporation as holding contingent claims on the assets of the corporation. Each claim holder has different priorities, maturities and conditions for payouts. It is based on the principle that all the assets belong to all the liability holders.The BSM modeling framework gives the basic fundamental version of the structural model where default is assumed to occur when the net asset value of the firm at the maturity of the pure-discount debt becomes negative, i.e., market value of the assets of the firm falls below the face value of the firm's liabilities. In a regime of limited liability, the shareholders of the firm have the option to default on the firm's debt. Equity can be viewed as a European call option on the firm's assets with a strike price equal to the face value of the firm's debt. Actually, CCA can be used to value all the components of the firm's liabilities, equity, warrants, debt, contingent convertible debt, guarantees, etc.In the four volumes we present the major academic research on CCA in corporate finance starting from 1973, with seminal papers of Black and Scholes (1973) and Merton (1973, 1974). Volume I covers the foundation of CCA and contributions on equity valuation. Volume II focuses on corporate debt valuation and the capital structure of the firm. Volume III presents empirical evidence on the valuation of debt instruments as well as applications of the CCA to various financial arrangements. The papers in Volume IV show how to apply the CCA to analyze sovereign credit risk, contingent convertible bonds (CoCos), deposit insurance and loan guarantees. Volume 1: Foundations of CCA and Equity ValuationVolume 1 presents the seminal papers of Black and Scholes (1973) and Merton (1973, 1974). This volume also includes papers that specifically price equity as a call option on the corporation. It introduces warrants, convertible bonds and taxation as contingent claims on the corporation. It highlights the strong relationship between the CCA and the Modigliani-Miller (M&M) Theorems, and the relation to the Capital Assets Pricing Model (CAPM). Volume 2: Corporate Debt Valuation with CCAVolume 2 concentrates on corporate bond valuation by introducing various types of bonds with different covenants as well as introducing various conditions that trigger default. While empirical evidence indicates that the simple Merton's model underestimates the credit spreads, additional risk factors like jumps can be used to resolve it. Volume 3: Empirical Testing and Applications of CCAVolume 3 includes papers that look at issues in corporate finance that can be explained with the CCA approach. These issues include the effect of dividend policy on the valuation of debt and equity, the pricing of employee stock options and many other issues of corporate governance. Volume 4: Contingent Claims Approach for Banks and Sovereign DebtVolume 4 focuses on the application of the contingent claim approach to banks and other financial intermediaries. Regulation of the banking industry led to the creation of new financial securities (e.g., CoCos) and new types of stakeholders (e.g., deposit insurers).

Download or read book The Principles of Bond Investment written by Lawrence Chamberlain and published by Beard Books. This book was released on 1999-10 with total page 718 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Valuation of Defaultable Bonds and Debt Restructuring written by Ariadna Dumitrescu and published by . This book was released on 2015 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we develop a contingent valuation model for zero-coupon bonds with default. In order to emphasize the role of maturity time and place of the lender's claim in a firm's debt hierarchy, we consider a firm that issues two bonds with different maturities and different seniorage. The model allows us to analyze the implications of both debt renegotiation and capital structure of a firm on the prices of bonds. We obtain that renegotiation brings about a significant change in the bond prices and that the effect is dispersed through various channels: increasing the value of the firm, reallocating payments, and avoiding costly liquidation. Moreover, the presence of two creditors leads to qualitatively different implications for pricing, while emphasizing the importance of bond covenants and renegotiation of the entire debt.

Download or read book Debt Covenants and Credit Spread Valuation written by Tat Sean Chang and published by . This book was released on 2013 with total page 309 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book High Yield Bonds written by Theodore M. Barnhill and published by McGraw-Hill Companies. This book was released on 1999 with total page 616 pages. Available in PDF, EPUB and Kindle. Book excerpt: High-Yield Bonds provides state-of-the-art research, strategies, and tools - alongside the expert analysis of respected authorities to help you truly understand today's high-yield market. High-Yield Bonds provides extensive coverage of bond valuation and the construction and management of high-yield portfolios. Advanced Monte Carlo simulation models for the valuation of bonds and options on bonds as well as risk assessments on portfolios of bonds under conditions of correlated interest rate and credit risk are demonstrated. High-Yield Bonds will provide you with a valuable reference to this fascinating and constantly changing class of securities, helping you assemble a stable, diversified portfolio of fixed income investments that provides the greatest returns and the lowest risks.

Download or read book Costly Contracting written by Claudia Sue Kocher and published by . This book was released on 1993 with total page 302 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Corporate Bonds written by Richard C. Wilson and published by John Wiley & Sons. This book was released on 1995-02-15 with total page 414 pages. Available in PDF, EPUB and Kindle. Book excerpt: Corporate Bonds: Structures & Analysis covers every aspect of corporate bonds, including bond structures, credit analysis, and investment strategies. This book discusses state-of-the-art technology for valuing corporate bonds, as well as innovative new products such as step-up notes and range notes. Complete with contributions from today's top financial experts, Corporate Bonds is the definitive reference for this vital market.

Download or read book Debt Management written by John D. Finnerty and published by Oxford University Press. This book was released on 2001 with total page 468 pages. Available in PDF, EPUB and Kindle. Book excerpt: When companies need fuel to grow, bonds may be the way to go. Traditional blue-chip firms and dot-com startups alike can use debt strategically as a key financial instrument. The critical challenge, however, is integrating corporate debt into core business strategies and established financial policies. This practical book provides practitioners in every industry with a comprehensive, prudent approach to managing corporate debt obligations. Written by leading experts in the field and drawing from case studies of real companies, Debt Management walks financial professionals through the entire decision-making process--from designing debt issues to retiring debt through bond redemptions and bond repurchases, all to meet corporate financial objectives. Unique in its presentation of the issuer's perspective--that is, it looks at debt from the company's viewpoint, and not just the buyer's or underwriter's--this work will be the industry reference on debt management and the corporate financier's desktop consultant for years to come. With insights into how factors such as bond valuation methodologies, derivatives, and tax and regulatory restrictions affect the process, the authors provide practitioners in both the U.S. and international debt markets with the information and tools needed to make smart debt-management decisions. With first-rate thinking in finance, while keeping the complex mathematics to a minimum, this volume will prove as handy as it is indispensable--the essential reference for planning, implementing, and managing corporate debt with discretion and confidence.

Download or read book The Debt Market Fixed income instruments written by Stephen A. Ross and published by . This book was released on 2000 with total page 462 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book A Note on the Valuation of Risky Corporate Bonds written by Rainer Schoebel and published by . This book was released on 1999 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Simple formulas for the prices of corporate discount and coupon bonds are found using the Longstaff and Schwartz (1995) valuation approach for the debt claims of a firm, where default is triggered by a special state variable: the firm's asset-to-debt-ratio. Instead of keeping the total amount of debt constant over time, it is shown that closed form solutions exist under the alternative assumption that the level of leverage is expected to remain constant over time under the risk-neutralized measure. This encourages a more conservative view on the capital structure policy of the firm which might be appropriate in case the firm is neither willing nor able to reduce its expected level of leverage considerably over time.

Download or read book Bond Prices Yield Spreads and Optimal Capital Strucutre with Default Risk written by Hayne E. Leland and published by . This book was released on 1994 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: