Booth, Laurence, Gounopoulos, Dimitrios and Skinner, Frank (2014) The choice between non-callable and callable bonds. Journal Of Financial Research, 37. pp. 435-460. ISSN 0270-2592

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Abstract

We examine the choice and the offer spreads between callable and non-callable bonds. We find significant differences by industry sector so our results are segmented by financial and non-financial industries. For the financial sector, the popularity of callable and non-callable bonds is significantly related to the economic environment. Financial and high grade non-financial callable bonds are also more likely to be issued via a shelf prospectus. While firms that issue callable bonds do not consistently display the characteristics associated with severe agency problems, the issue choice for below investment grade non-financial and lower rated financial bonds, where we can expect agency problems to be more severe, is more consistent with agency theory than the issue choice for higher rated bonds.

Item Type:	Article
Schools and Departments:	School of Business, Management and Economics > Business and Management
Subjects:	H Social Sciences > HG Finance > HG4001 Finance management. Business finance. Corporation finance
Depositing User:	Dimitrios Gounopoulos
Date Deposited:	12 Aug 2014 14:43
Last Modified:	08 Jun 2015 09:02
URI:	http://srodev.sussex.ac.uk/id/eprint/49562

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