IDEAS home Printed from https://ideas.repec.org/a/oup/rfinst/v31y2018i8p3061-3097..html
   My bibliography  Save this article

Kicking Maturity Down the Road: Early Refinancing and Maturity Management in the Corporate Bond Market

Author

Listed:
  • Qiping Xu

Abstract

This paper examines debt maturity management through early refinancing, where firms retire their outstanding bonds before the due date and simultaneously issue new ones as replacements. Speculative-grade firms frequently refinance their corporate bonds early to extend maturity, particularly under accommodating credit supply conditions, leading to a procyclical maturity structure. In contrast, investment-grade firms do not manage their maturity in the same manner. I exploit the protection period of callable bonds to show that the maturity extension is not driven by unobservable confounding factors. The evidence is consistent with speculative-grade firms dynamically managing maturity to mitigate refinancing risk. Received June 6, 2016; editorial decision September 21, 2017 by Editor Philip Strahan.

Suggested Citation

  • Qiping Xu, 2018. "Kicking Maturity Down the Road: Early Refinancing and Maturity Management in the Corporate Bond Market," The Review of Financial Studies, Society for Financial Studies, vol. 31(8), pages 3061-3097.
    • Handle: RePEc:oup:rfinst:v:31:y:2018:i:8:p:3061-3097.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/rfs/hhx116
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Melvin Jameson & Tao‐Hsien Dolly King & Andrew Prevost, 2021. "Top management incentives and financial flexibility: The case of make‐whole call provisions," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 48(1-2), pages 374-404, January.
    2. Nina Boyarchenko & Leonardo Elias, 2023. "The Good, the Bad, and the Ugly of International Debt Market Data," Staff Reports 1074, Federal Reserve Bank of New York.
    3. Dick-Nielsen, Jens & Nielsen, Mads Stenbo & von Rüden, Stine Louise, 2021. "The value of bond underwriter relationships," Journal of Corporate Finance, Elsevier, vol. 68(C).
    4. Cici, Gjergji & Zhang, Pei (Alex), 2021. "On the valuation skills of corporate bond mutual funds," CFR Working Papers 21-05, University of Cologne, Centre for Financial Research (CFR).
    5. Eric Powers, 2021. "The Optimality of Call Provision Terms," Management Science, INFORMS, vol. 67(10), pages 6581-6601, October.
    6. Doruk Cetemen & Felix Zhiyu Feng & Can Urgun, 2019. "Contracting with Non-Exponential Discounting: Moral Hazard and Dynamic Inconsistency," Working Papers 2019-17, Princeton University. Economics Department..
    7. Brown, Scott & Powers, Eric, 2020. "The life cycle of make-whole call provisions," Journal of Corporate Finance, Elsevier, vol. 65(C).
    8. Jun Kyung Auh & Mattia Landoni, 2022. "Loan Terms and Collateral: Evidence from the Bilateral Repo Market," Journal of Finance, American Finance Association, vol. 77(6), pages 2997-3036, December.
    9. Qi, Qianru & Wang, Jing, 2021. "Debt structure instability using machine learning," Journal of Financial Stability, Elsevier, vol. 57(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:rfinst:v:31:y:2018:i:8:p:3061-3097.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/sfsssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.