-
Views
-
Cite
Cite
Alberto Manconi, Massimo Massa, Lei Zhang, Bondholder Concentration and Credit Risk: Evidence from a Natural Experiment , Review of Finance, Volume 20, Issue 1, March 2016, Pages 127–159, https://doi.org/10.1093/rof/rfv010
- Share Icon Share
Abstract
We exploit the impact of hurricane Katrina on insurance companies to study the relationship between bondholder concentration and credit risk. Redemption-driven sales by property and casualty (re)insurance companies exposed to hurricane Katrina are associated with a large drop in bondholder concentration faced by corporate bond issuers. Exploiting this shock to capture exogenous variation in bondholder concentration, we find that greater bondholder concentration is associated with higher bond yield spreads, as well as with firm characteristics associated with credit risk.