The effects of corporate bond granularity

Lars Norden, Peter Roosenboom, T Wang

Research output: Contribution to journalArticleAcademicpeer-review

10 Citations (Scopus)

Abstract

We investigate whether and how firms manage their rollover risk by having a dispersed bond maturity structure (granularity). Granularity can be achieved or maintained by frequently issuing sets of bonds with different maturities. We find that firms with higher granularity have higher availability of financing, lower cost of financing, lower financial constraints and lower stock return volatility. The effects are stronger for firms that face higher rollover risk. The evidence suggests that spreading out bond maturities is an effective corporate policy to manage rollover risk.
Original languageEnglish
Pages (from-to)25-34
Number of pages10
JournalJournal of Banking and Finance
Volume63
DOIs
Publication statusPublished - 2016

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