Suchergebnisse

THE AUTHOR ANALYZES THE COSTS AND BENEFITS OF DEBT-EQUITY SWAPS TO ALL THE ACTORS INVOLVED--THE DEVELOPING COUNTRIES, BANKS, FOREIGN INVESTORS, AND THE U.S. GOVERNMENT--AND OUTLINES A U.S. GOVERNMENT POLICY TOWARD DEBT SWAPS THAT WOULD ALLOW ACTORS TO HAVE THE BENEFITS OF SWAPS WHILE MINIMIZING THEIR COSTS.

Examines the costs and benefits of debt-equity swaps to all the actors involved--developing countries, banks, foreign investors and the US government--and suggests a US government policy toward debt swaps that will allow actors to have the benefits of swaps while minimizing their costs. (RSM)

AbstractWe examine whether the presence of loan covenants leads firms to choose either an asset or equity acquisitions. Asset acquisitions involve the selective purchase of a target company's assets, and equity acquisitions involve acquisitions of common stocks. We document that firms with loan covenants are more likely to engage in asset acquisitions as opposed to equity acquisitions. Our results are robust to alternative measures of loan covenants and to endogeneity concerns. Furthermore, the association between loan covenants and asset acquisitions is stronger among firms with greater debt covenant intensity, more severe agency problems, and lower profitability. Acquirers facing more intense competition within their industries are also likely to choose asset acquisitions. Our findings suggest that acquirers' incentives to avoid wealth transfer at the expense of debtholders drive the relation between debt covenants and choice of acquisition structure.