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Corporate Borrowing and Debt Maturity: The Effects of Market Access and Crises

Juan J. Cortina (), Tatiana Didier () and Sergio Schmukler ()
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Juan J. Cortina: World Bank

No 149, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences

Abstract: This paper studies how access to different markets and crises impact debt financing and maturity. Using data on worldwide corporate issuance activity in domestic and international bond and syndicated loan markets during 1991-2014, the paper shows that these markets are affected differently by crises, while providing financing to different firms at distinct maturities. During the global financial crisis and domestic banking crises, large firms moved away from the crisis-hit markets toward less affected, longer-term ones, switching their financing sources. Hence, firms that switched markets compensated for the financing shocks and maintained, or increased, their borrowing maturity. Country-level maturities also remained stable or even lengthened. However, firms that did not move across markets typically experienced declining financing and shorter borrowing maturities. Firm movements across markets are consistent with credit tightening during crises due to supply-side shocks, significantly affecting debt composition, borrowing maturity, and credit redistribution across firms of different sizes.

Keywords: borrowing maturity; capital raising; corporate bonds; debt markets; firm financing; global financial crisis (GFC); syndicated loans (search for similar items in EconPapers)
JEL-codes: F65 G00 G10 G32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn
Date: 2018-07
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http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir149.pdf First version, 2018 (application/pdf)

Related works:
Working Paper: Corporate Borrowing and Debt Maturity: The Effects of Market Access and Crises (2018) Downloads
Working Paper: Corporate borrowing and debt maturity: the effects of market access and crises (2016) Downloads
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