The cost of financing with callable bonds: an empirical study

Le coût du financement par obligations rachetables: une étude empirique

Maxime Debon (), Franck Moraux () and Patrick Navatte
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Maxime Debon: UEVE - Université d'Évry-Val-d'Essonne, LITEM - Laboratoire en Innovation, Technologies, Economie et Management (EA 7363) - EESC-GEM Grenoble Ecole de Management - UEVE - Université d'Évry-Val-d'Essonne - TEM - Télécom Ecole de Management

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Abstract: This paper examines the cost of financing with callable bonds on a sample of 2927 US bonds issued at par between 1984 and 2014. Our hedonic regression model indicates, among other things, that issuing callable bonds rather than ordinary bonds costs about 10% of the coupon rate and that the additional cost may vary significantly across time. Interestingly, results of a couple of decomposition models suggest that issuers may benefit from issuing callable bonds.

Keywords: Taux de coupon; Coût de financement; Obligation rachetable; Décomposition de Blinder-Oaxaca (search for similar items in EconPapers)
Date: 2015-06
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Published in Finance Contrôle Stratégie, 2015, 18 (2), pp.17-35. ⟨10.4000/fcs.1612⟩

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Working Paper: The cost of financing with callable bonds: an empirical study (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01238561

DOI: 10.4000/fcs.1612

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