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Journal of Financial Economics Vol. 130 No. 3 2018

Corporate debt maturity profiles

Jaewon Choi1; Dirk Hackbarth2; Josef Zechner3

1 University of Illinois Urbana-Champaign, Department of Finance, 515 E. Gregory Drive, Champaign, IL 61820, USA · 2 Boston University · 3 Vienna University of Economics and Business, Department of Finance, Accounting and Statistics, Welthandelsplatz 1, 1020 Vienna, Austria

Abstract

We study a novel aspect of a firm’s capital structure, namely, the profile of its debt maturity dates. In a simple theoretical framework we show that the dispersion of debt maturities constitutes an important dimension of capital structure choice, driven by firm characteristics and debt rollover risk. Guided by these predictions we establish two main empirical results. First, using an exogenous shock to rollover risk, we document a significant increase in maturity dispersion for firms that need to roll over maturing debt. Second, we find strong support that maturities of newly issued debt are influenced by pre-existing maturity profiles.

DOI
10.1016/j.jfineco.2018.07.009
Volume
130
Issue
3
Pages
484-502
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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