Skip to main content

Financial Contracting and the Choice between Private Placement and Publicly Offered Bonds

Buy Article:

$43.00 plus tax (Refund Policy)

The financial contracting in private placement bonds and publicly offered bonds are different. Our data show that private placement bonds are more likely to have restrictive covenants than public bonds. Private placement bonds are also more likely to be issued by smaller and riskier firms. For investment-grade firms that issue bonds in both markets, our analysis shows that firms select the bond type to minimize financing costs. We find significant differences in the pricing of private placement and publicly offered bonds, and some of these differences appear to be related to the different institutional features between the two markets.
No References
No Citations
No Supplementary Data
No Article Media
No Metrics

Keywords: G10; G12; G22; debt choice; financial contracting; private debt; private placement bond

Document Type: Research Article

Affiliations: 1: Simon H. Kwan is a Vice President, Head of Financial Research, Economic Research Department at Federal Reserve Bank of San Francisco (  )., Email: [email protected] 2: Willard T. Carleton is a Professor Emeritus of Finance at the College of Business and Public Administration, University of Arizona, Tucson (  )., Email: [email protected]

Publication date: 2010-08-01

  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more