This study examines the use and determinants of covenants in public debt issued by Russian companies. Based on issue characteristics and firm characteristics, we investigate the likelihood that the inclusion of covenant clauses in financial contracts is positively related to the riskiness of bond issues. Using a hand-collected database of Russian firms that place bonds in both the domestic and Eurobond markets, we provide evidence that Russian bondholders use covenant protection to compensate for different creditor protections when the firm has Eurobonds in its debt portfolio. We also find a general negative relation between covenant protection and the bond’s yield.

The role of covenants in bond issue: The case of Russian companies / Bazzana, Flavio; Zadorozhnaya, Anna; Gabriele, Roberto. - In: EMERGING MARKETS REVIEW. - ISSN 1566-0141. - ELETTRONICO. - 36:(2018), pp. 1-18. [10.1016/j.ememar.2018.03.003]

The role of covenants in bond issue: The case of Russian companies.

Bazzana, Flavio;Gabriele, Roberto
2018-01-01

Abstract

This study examines the use and determinants of covenants in public debt issued by Russian companies. Based on issue characteristics and firm characteristics, we investigate the likelihood that the inclusion of covenant clauses in financial contracts is positively related to the riskiness of bond issues. Using a hand-collected database of Russian firms that place bonds in both the domestic and Eurobond markets, we provide evidence that Russian bondholders use covenant protection to compensate for different creditor protections when the firm has Eurobonds in its debt portfolio. We also find a general negative relation between covenant protection and the bond’s yield.
2018
Bazzana, Flavio; Zadorozhnaya, Anna; Gabriele, Roberto
The role of covenants in bond issue: The case of Russian companies / Bazzana, Flavio; Zadorozhnaya, Anna; Gabriele, Roberto. - In: EMERGING MARKETS REVIEW. - ISSN 1566-0141. - ELETTRONICO. - 36:(2018), pp. 1-18. [10.1016/j.ememar.2018.03.003]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11572/205176
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