Financial contracting under extreme uncertainty: an analysis of Brazilian corporate debentures

Article Abstract:

Fifty indenture agreements for Brazilian corporate debentures issued from 1989 to 1993 were studied. These debt contracts were made when Brazil was suffering from economic volatility, high transaction costs and weak institutions. They have four main features. They were issued to protect returns from inflation. Secondly, they have contingent-maturity mechanisms for exit, adaptation and renegotiation. They also do not restrict the debtor's dividend, investment and financing policies. Lastly, they have self-enforcement mechanisms as a way to bypass inefficient institutions.

Brazil, Corporate bonds, Credit market, Credit markets

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The financial performance of reverse leveraged buyouts

Article Abstract:

An analysis of the financial performance of reverse leveraged buyouts reveals that these buyout firms demonstrate better accounting performance than their industries during initial public offering (IPO). Their performance is still better than their industries four years after the IPO, although at a declining capacity. The examination indicates a relationship between cross-sectional fluctuation in accounting performance after the IPO and changes in the equity ownership of operating management and other insiders.

Research, Going public (Securities), Initial public offerings, Leveraged buyouts

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Security Price Reactions around Corporate Spin-Off Announcements

Article Abstract:

Security price reactions to voluntary spin-offs are examined for 123 firms from 1963 through 1981. Spin-offs are associated with periods of positive stock price revaluations unless the spin-off is a defense against legal or regulatory problems. Spinoffs are attributed to providing contracting efficiency.

By-products

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