Capital Structure, Credit Risk, and Macroeconomic Conditions

This paper develops a framework for analyzing the impact of macroeceomic conditions on credit risk and dynamic capital structure choice. We begin by observing that when cash flows depend on current economic conditions, there will be a benefit for firms to adapt their default and financing policies to the position of the economy in the business cycle phase. We then demonstrate that this simple observation has a wide range of implications for corporations. Notably, we show that our model can replicate observed debt levels and the countercyclicality of leverage ratios. We also demonstrate that it can reproduce the observed term structure of credit spreads and generate strictly positive credit spreads for very short maturities. Finally, we characterize the impact of macroeconomic conditions on the pace and size of capital structure changes, and debt capacity. A number of new predictions follow.Dynamic capital structure; Credit spreads; Macroeconomic conditions

Capital Structure, Credit Risk, and Macroeconomic Conditions

This paper develops a framework for analyzing the impact of macroeconomic conditions on credit risk and dynamic capital structure choice. We begin by observing that when cash flows depend on current economic conditions, there will be a benefit for firms to adapt their default and financing policies to the position of the economy in the business cycle phase. We then demonstrate that this simple observation has a wide range of empirical implications for corporations. Notably, we show that our model can replicate observed debt levels and the countercyclicality of leverage ratios. We also demonstrate that it can reproduce the observed term structure of credit spreads and generate strictly positive credit spreads for debt contracts with very short maturities. Finally, we characterize the impact of macroeconomic conditions on the pace and size of capital structure changes, and debt capacity.Dynamic capital structure, Credit spreads, Macroeconomic conditions

The Firm-Level Credit Multiplier

We study the effect of asset tangibility on corporate financing and investment decisions. Financially constrained firms benefit the most from investing in tangible assets because those assets help relax constraints, allowing for further investment. Using a dynamic model, we characterize this effect – which we call firm-level credit multiplier – and show how asset tangibility increases the sensitivity of investment to Tobin’s Q for financially constrained firms. Examining a large sample of manufacturers over the 1971-2005 period as well as simulated data, we find support for our theory’s tangibility–investment channel. We further verify that our findings are driven by firms’ debt issuance activities. Consistent with our empirical identification strategy, the firm-level credit multiplier is absent from samples of financially unconstrained firms and samples of financially constrained firms with low spare debt capacity.

Granularity of corporate debt : [Version 9 Mai 2013]

We study to what extent firms spread out their debt maturity dates across time, which we call "granularity of corporate debt." We consider the role of debt granularity using a simple model in which a firm's inability to roll over expiring debt causes inefficiencies, such as costly asset sales or underinvestment. Since multiple small asset sales are less costly than a single large one, firms may diversify debt rollovers across maturity dates. We construct granularity measures using data on corporate bond issuers for the 1991-2011 period and establish a number of novel findings. First, there is substantial variation in granularity in that many firms have either very concentrated or highly dispersed maturity structures. Second, our model's predictions are consistent with observed variation in granularity. Corporate debt maturities are more dispersed for larger and more mature firms, for firms with better investment opportunities, with higher leverage ratios, and with lower levels of current cash flows. We also show that during the recent financial crisis especially firms with valuable investment opportunities implemented more dispersed maturity structures. Finally, granularity plays an important role for bond issuances, because we document that newly issued corporate bond maturities complement pre-existing bond maturity profiles

Capital Structure, Credit Risk, and Macroeconomic Conditions

This paper develops a framework for analyzing the impact of macroeconomic conditions on credit risk and dynamic capital structure choice. We begin by observing that when cash flows depend on current economic conditions, there will be a benefit for firms to adapt their default and financing policies to the position of the economy in the business cycle phase. We then demonstrate that this simple observation has a wide range of empirical implications for corporations. Notably, we show that our model can replicate observed debt levels and the countercyclicality of leverage ratios. We also demonstrate that it can reproduce the observed term structure of credit spreads and generate strictly positive credit spreads for debt contracts with very short maturities. Finally, we characterize the impact of macroeconomic conditions on the pace and size of capital structure changes, and debt capacity.Dynamic capital structure; Credit spreads; Macroeconomic conditions

Liquid Study 1

For string quartet and electronic sound

Scaling study of Si/SiGe MODFETs for RF applications

Based on the successful calibration on a 0.25 /spl mu/m strained Si/SiGe n-type MODFET, this paper presents a gate length scaling study of double-side doped Si/SiGe MODFETs. Our simulations show that gate length scaling improves device RF performance. However, the short channel effects (SCE) along with the parasitic delays limit the device performance improvements. We find that it is necessary to consider scaling (dimensions and doping) of both the lateral and vertical architecture in order to optimize the device design

Liquid Study no. 2

Liquid Study no. 2 is one of a series of pieces that explore an imagined sonic physics based on the behaviour of fluids. This particular work came about through my admiration for Mario Davidovsky’s Synchronisms no 6 for piano and electronics, a piece which itself exhibits fluidity in a variety of musical domains. My composition engages with three aspects of Davidosky's work: • An isolated note, G, begins both pieces. This pitch is initially an object of timbral intrigue, but later becomes a reference point to which all other pitches (and actions) are tethered. • Tension from the mixture of a familiar and visually-present instrument (the piano) and an unfamiliar and visually-absent sonic force (the electronics). As in Davidovsky’s composition, these two forces are continuously intertwined in my work, but friction also comes from the fact that while the piano and electronics share a similar sound world, the electronics perpetually transform the piano’s sound in ways which directly contradict its physical capabilities. • An intense, sudden and unexpected tremolo. In the Davidovsky it is a climactic moment which acts as a keystone on an arch built out of many disjunct elements. In my piece this gesture is more consequential in terms of form - the tremolo marks a moment where the listener is suddenly plunged into a new medium, more viscous and resistant than before. This watershed gesture irrevocably alters how musical time moves forward