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    Debt valuation and chapter 22

    Breccia, Adriana and Perraudin, W. (2010) Debt valuation and chapter 22. Working Paper. Birkbeck College, University of London, London, UK.

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    Abstract

    Numerous studies have examined the effect on credit spreads of renegotiation. These studies have generally focused on the impact on spread levels in general, and not on how renegotiation influences the relative pricing of senior versus junior debt claims. In this paper, we show that the scope for sequential renegotiation may reduce and even eliminate the premium for debt seniority. Our analysis also explains why companies may engage in repeated Chapter 11 bankruptcy filings (a phenomenon commonly referred to as Chapter 22).

    Metadata

    Item Type: Monograph (Working Paper)
    Additional Information: BWPEF 1015
    Keyword(s) / Subject(s): real options, bankruptcy, debt service, absolute priority, bargaining
    School: Birkbeck Schools and Departments > School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Depositing User: Administrator
    Date Deposited: 20 Jun 2013 10:56
    Last Modified: 11 Oct 2016 11:55
    URI: http://eprints.bbk.ac.uk/id/eprint/7524

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