Journal article
Securitization and Capital Structure in Nonfinancial Firms: An Empirical Investigation
The Journal of finance (New York), v 69(4), pp 1787-1825
01 Aug 2014
Abstract
Contrary to recent accounts of off-balance-sheet securitization by financial firms, we show that asset securitization by nonfinancial firms provides a valuable form of financing for shareholders without harming debtholders. Using data from firms' SEC filings, we find that securitization is attractive to firms in the middle of the credit quality distribution, which are the firms with the most to gain. Upon initiation, firms experience positive abnormal stock returns and zero abnormal bond returns, and largely use the securitization proceeds to repay existing debt. Securitization minimizes financing costs by reducing expected bankruptcy costs and providing access to segmented credit markets.
Metrics
Details
- Title
- Securitization and Capital Structure in Nonfinancial Firms: An Empirical Investigation
- Creators
- Michael Lemmon - Hong Kong Univ Sci & Technol, Hong Kong, Hong Kong, Peoples R ChinaLaura Xiaolei Liu - Hong Kong Univ Sci & Technol, Hong Kong, Hong Kong, Peoples R ChinaMike Qinghao Mao - Erasmus Univ, NL-3000 DR Rotterdam, NetherlandsGreg Nini - Drexel Univ, LeBow Coll Business, Philadelphia, PA USA
- Publication Details
- The Journal of finance (New York), v 69(4), pp 1787-1825
- Publisher
- Wiley
- Number of pages
- 39
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000339506600011
- Scopus ID
- 2-s2.0-84904438377
- Other Identifier
- 991019170851504721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance
- Economics