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SWF investments and debt maturity of target firms: An international evidence

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  • Ghouma, Hatem H.
  • Ouni, Zeineb

Abstract

Using a sample of bonds issued by firms acquired by sovereign wealth funds (SWFs), we find a negative relationship between SWFs ownership and maturities of the bonds issued by their target firms. This deterioration in the bond contracting terms supports the political agenda hypothesis suggesting that SWFs, because of their superior information and non-value maximizing agenda, could represent a threat to bondholders and hence exacerbates the agency problem.

Suggested Citation

  • Ghouma, Hatem H. & Ouni, Zeineb, 2022. "SWF investments and debt maturity of target firms: An international evidence," Finance Research Letters, Elsevier, vol. 46(PA).
    • Handle: RePEc:eee:finlet:v:46:y:2022:i:pa:s1544612321003421
    DOI: 10.1016/j.frl.2021.102312
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    Cited by:

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    2. Hasse, Jean-Baptiste & Lecourt, Christelle & Siagh, Souhila, 2024. "Setting up a sovereign wealth fund to reduce currency crises," Emerging Markets Review, Elsevier, vol. 62(C).
    3. Balestra, Anna & Caruso, Raul & Di Domizio, Marco, 2024. "What explains the size of Sovereign Wealth Funds? A panel analysis (2008–2018)," Finance Research Letters, Elsevier, vol. 62(PB).

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    More about this item

    Keywords

    Sovereign wealth fund; Bond maturity;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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