Do Enhanced Collective Action Clauses Affect Sovereign Borrowing Costs?

• Autorzy: Kay Chung , Michael G. Papaioannou
• Języki publikacji: EN

Abstrakty

EN

This paper analyzes the effects of including collective action clauses (CACs) and enhanced CACs in international (nondomestic law-governed) sovereign bonds on sovereigns' borrowing costs, using secondary-market bond yield spreads. Our findings indicate that inclusion of enhanced CACs, introduced in August 2014, is associated with lower borrowing costs for both noninvestment-grade and investment-grade issuers. These results suggest that market participants do not associate the use of CACs and enhanced CACs with borrowers' moral hazard, but instead consider their implied benefits of an orderly and efficient debt resolution process in case of restructuring. (original abstract)

Słowa kluczowe

EN

Theory of collective action; Bonds; Public debt; Indebtedness; Debt restructuring

PL

Teoria działań zbiorowych; Obligacje; Dług publiczny; Zadłużenie; Restrukturyzacja zadłużenia

• Czasopismo: Journal of Banking and Financial Economics
• Rocznik: 2021
• Numer: nr 1(15)
• Strony: 59--87

Twórcy

autor

Kay Chung

• International Monetary Fund, U.S.A.

autor

Michael G. Papaioannou

• LeBow College of Business

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Identyfikatory

DOI

10.7172/2353-6845.jbfe.2021.1.5