We investigate whether and through which channel credit rating downgrades induce corporate restructurings. For a comprehensive sample, we find a strong and robust link between rating actions and subsequent restructuring activity and hypothesize these could be disciplinary (ex-post efficient) or meant to counter tighter financial constraints (ex-post inefficient).
Based on the self-reported restructuring types and the choice of assets sold, we find evidence for rating-induced asset sales aimed to relax financial constraints. We find no evidence of firms addressing inefficiencies in their assets allocations as a result of ratings actions.
This chapter examines dual class common stock. Dual class stock has evolved from a vehicle used largely by insiders in family owned and media companies to...
In recent years, there has been a significant increase in the issuance of sustainability-linked loans (SLLs), where loan contract terms depend on the...
Larger-than-life corporate leaders, who can move fast and disrupt entrenched players, are often perceived as having the vision, superior leadership,...