skip to primary navigationskip to content
 

CF Weekly Workshop - Carsten Bienz

When May 24, 2011
from 05:00 PM to 06:00 PM
Where Winstanley Lecture Theatre, Trinity College
Contact Name
Add event to calendar vCal
iCal

Carsten Bienz (Norwegian School of Economics and Business Administration)

Title: The Defeasance of Control Rights (co-authored with Antoine Faure-Grimaud (LSE) and Zsuzsanna Fluck (MSU)).

 We analyze one frequent clause in bonds, covenant defeasance. Covenant defeasance allows the issuer to remove the bond's covenants by placing the remaining payments with a trustee in escrow to be paid out on schedule. We provide theoretical justification for this option and show empirically that it allows inclusion of more covenants in bond issues. We highlight characteristics that make issuers likely to add a defeasance clause. In line with the model's prediction, the empirical analysis documents 13-24 basis points yield reduction for defeasible bonds - annual saving of about $1m, or $11m over the life of the average bond.

« March 2017 »
March
MoTuWeThFrSaSu
12345
6789101112
13141516171819
20212223242526
2728293031

Upcoming events

Cambridge Finance Workshop - Erwan Morellec

May 04, 2017

Room W4.03, Cambridge Judge Business School

Cambridge Finance Workshop - Rene Stulz

May 18, 2017

Room W4.03, Cambridge Judge Business School

Cambridge Finance Workshop - Katrin Tinn

Jun 01, 2017

Room W4.03, Cambridge Judge Business School

Previous events

Upcoming events