Creditor Rights, Claims Enforcement, and Bond Performance in Mergers and Acquisitions

Luc Renneboog, Peter Szilagyi, Cara Vansteenkiste

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This paper shows that country-level differences in creditor protection affect bond performance around cross-border M&A announcements. Using Eurobonds and a global sample of 1,100 cross-border M&As, we find that the bondholders of bidding firms respond more positively to deals that expose their firm to a jurisdiction with stronger creditor rights and more efficient claims enforcement through courts. Positive creditor protection spillovers are enhanced by now-global jurisdictional cooperation in multinational insolvencies and creditors’ ability to do insolvency arbitrage. The spillover effects we observe are stronger for firms with higher asset risk, longer maturity bonds, and a higher likelihood of financial distress.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages45
Publication statusPublished - 15 Mar 2017

Publication series

NameCentER Discussion Paper



  • bondholder value
  • cross-border mergers and acquisitions (M&As)
  • creditor rights
  • legal enforcement
  • eurobonds

Cite this

Renneboog, L., Szilagyi, P., & Vansteenkiste, C. (2017). Creditor Rights, Claims Enforcement, and Bond Performance in Mergers and Acquisitions. (CentER Discussion Paper; Vol. 2017-012). Tilburg: CentER, Center for Economic Research.