Faithin Omaha eBook Collection

Download or read book Recovery Ratios and Survival Times for Corporate Bonds written by Ivailo Izvorski and published by International Monetary Fund. This book was released on 1997-07-01 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the determinants of the recovery ratios and survival times (time until default) for U. S. corporate bonds. We show that seniority, the type of industry in which the firm operates, and the type of restructuring attempted after default are the major determinants of the cross-sectional distribution of individual bond recovery ratios. On an industry level, physical asset obsolescence, industry growth, and industry concentration are the most important factors. We also analyze survival times for corporate bonds and find that initial time to maturity and the general economic conditions at maturity and default explain a large fraction of the cross-sectional variation of survival times.