Next Article in Journal
Systemic Risk in the European Union: A Network Approach to Banks’ Sovereign Debt Exposures
Previous Article in Journal
Corporate Governance Provisions, Family Involvement, and Firm Performance in Publicly Traded Family Firms
Open AccessArticle

Bond Indenture Consent Solicitations as a Debt Management Tool

1
Faculty of Department of Finance, Banking and Insurance, Appalachian State University, Boone, NC 28608, USA
2
Faculty of Department of Management, Appalachian State University, Boone, NC 28608, USA
*
Author to whom correspondence should be addressed.
These authors contributed equally to this work.
Academic Editor: Nicholas Apergis
Int. J. Financial Stud. 2015, 3(3), 230-243; https://doi.org/10.3390/ijfs3030230
Received: 15 May 2015 / Revised: 6 July 2015 / Accepted: 10 July 2015 / Published: 22 July 2015
Many companies in recent years are seeking new ways to manage their debt liabilities. Companies with outstanding debt securities can engage in a variety of transactions with bond holders. Choices will depend to some extent on whether or not the company has access to cash and is able to purchase in the open market or through cash tender offer, or if without cash, by making an exchange offer of new securities for existing securities. Often in either case, there is a bond indenture consent solicitation needed to waive or amend existing bond terms, the announcement of which signals management’s intent to the market. Given the increasing prevalence of this practice as a debt management tool, this study seeks to determine whether it is truly perceived to be value enhancing by stockholders. Using an event study of 50 companies announcing bond indenture consent solicitations, we find that shareholders do benefit, and companies appear well served by this practice. View Full-Text
Keywords: bond indenture consent solicitations; bondholder coercion; debt risk management bond indenture consent solicitations; bondholder coercion; debt risk management
MDPI and ACS Style

Anderson-Parson, J.A.; Keasler, T.R.; Byerly, R.T. Bond Indenture Consent Solicitations as a Debt Management Tool. Int. J. Financial Stud. 2015, 3, 230-243.

Show more citation formats Show less citations formats

Article Access Map

1
Only visits after 24 November 2015 are recorded.
Back to TopTop