Do Nonrefunding Provisions Constrain Corporate Behavior? Evidence from Calls
研究企业如何赎回非偿还债券，发现企业常在利率下降时赎回这类债券，并通过发行低息债务来融资，表明非偿还条款对企业的约束力很弱，这可能是该条款在1990年代初被放弃的原因。
I examine corporate call policy for nonrefundable debt. Nonrefundable bonds purportedly cannot be called with funds from lower-interest-cost debt. However, firms tend to call nonrefundable debt following interest rate decreases. The calling firms typically issue lower-interest- cost debt around the time of the call and do not identify the source of funds used to call the debt. These actions show the weakness of the constraints imposed by the nonrefunding provision on firms’ call policies and may have led to the abandonment of the provision in the early 1990s and the adoption of potentially superior contracting mechanisms.