Debt Structure, Market Value of Firm, and Recovery Rate

by Office of the Comptroller of the Currenc and Office of the Comptroller of the Currency

This paper examines the determinants of creditor recoveries from defaulted debt instruments, an important yet under-studied area in investment and risk management. First, we argue that to properly measure a debt instrument's relative position in a firm's debt structure, debt pari passu to the instrument must be taken into account. We propose a new measure of seniority and find that it is the most important determinant of recovery rates, explaining...

• Format: Paperback
• Language: English
• ISBN: 1505381789
• ISBN13: 9781505381788
• Release Date: January 2015
• Publisher: Createspace Independent Publishing Platform
• Length: 44 Pages
• Weight: 0.28 lbs.
• Dimensions: 0.1" x 8.5" x 11.0"