The role of covenants in bond issue. The case of Russian companies

Flavio Bazzana, Anna Zadorozhnaya and Roberto Gabriele ()

Emerging Markets Review, 2018, vol. 36, issue C, 1-18

Abstract: This study examines the use and determinants of covenants in public debt issued by Russian companies. Based on issue characteristics and firm characteristics, we investigate the likelihood that the inclusion of covenant clauses in financial contracts is positively related to the riskiness of bond issues. Using a hand-collected database of Russian firms that place bonds in both the domestic and Eurobond markets, we provide evidence that Russian bondholders use covenant protection to compensate for different creditor protections when the firm has Eurobonds in its debt portfolio. We also find a general negative relation between covenant protection and the bond's yield.

Keywords: Covenants; Bond; Russian companies (search for similar items in EconPapers)
JEL-codes: G31 G32 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1566014116301728
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:36:y:2018:i:c:p:1-18

DOI: 10.1016/j.ememar.2018.03.003

Access Statistics for this article

Emerging Markets Review is currently edited by Jonathan A. Batten

More articles in Emerging Markets Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().