Abstract
| Original language | English |
|---|---|
| Place of Publication | Tilburg |
| Publisher | CentER, Center for Economic Research |
| Number of pages | 45 |
| Volume | 2017-012 |
| Publication status | Published - 15 Mar 2017 |
Publication series
| Name | CentER Discussion Paper |
|---|---|
| Volume | 2017-012 |
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Keywords
- bondholder value
- cross-border mergers and acquisitions (M&As)
- creditor rights
- legal enforcement
- eurobonds
Cite this
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Creditor Rights, Claims Enforcement, and Bond Performance in Mergers and Acquisitions. / Renneboog, Luc; Szilagyi, Peter; Vansteenkiste, Cara.
Tilburg : CentER, Center for Economic Research, 2017. (CentER Discussion Paper; Vol. 2017-012).Research output: Working paper › Discussion paper › Other research output
TY - UNPB
T1 - Creditor Rights, Claims Enforcement, and Bond Performance in Mergers and Acquisitions
AU - Renneboog, Luc
AU - Szilagyi, Peter
AU - Vansteenkiste, Cara
PY - 2017/3/15
Y1 - 2017/3/15
N2 - 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.
AB - 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.
KW - bondholder value
KW - cross-border mergers and acquisitions (M&As)
KW - creditor rights
KW - legal enforcement
KW - eurobonds
M3 - Discussion paper
VL - 2017-012
T3 - CentER Discussion Paper
BT - Creditor Rights, Claims Enforcement, and Bond Performance in Mergers and Acquisitions
PB - CentER, Center for Economic Research
CY - Tilburg
ER -