Portfolio performance manipulation in collateralized loan obligations

We examine the discretionary activities that CLO managers engage in to pass monthly overcollateralization (OC) tests. These tests require a CLO’s loan portfolio value, scaled by the CLO notes’ principal balance, to be above a certain threshold. Using CLOs’ granular disclosures, we develop model-free estimates for discretionary loan fair valuation and transaction-based proxies for strategic loan trading. We find a positive association between these discretionary activities and the probability of avoiding an OC test violation. This association varies predictably with junior noteholders’ influence and CLO market conditions. Strategic trading—but not discretionary fair valuation—relates to worse future CLO performance

Counter-Demonstration as Protected Speech: Finding the Right to Confrontation in Existing First Amendment Law

Accordingly, this Article is aimed at disentangling lines of precedent that are all too frequently entwined by urging an analysis of public protest cases that distinguishes among the four regulatory players. Thus, this Article devotes separate sections to the regulatory roles of legislators,16 administrators,17 judges,18 and police,19 with an introductory section on the doctrinal bedrock in this field: the public forum doctrine.2

Equity cross-listings in the U.S. and the price of debt

Using a large panel from 46 countries over 20 years, we find that non-U.S. firms issue corporate bonds more frequently and at lower offering yields following an equity cross-listing on a U.S. exchange. Firms issue more bonds through public offerings instead of private placements and in foreign markets rather than at home, in both cases at significantly lower yields. Moreover, the debt-related benefits are concentrated among firms domiciled in countries with less private benefits of control, efficient debt enforcement, and developed bond markets, suggesting that equity cross-listings cannot completely offset the impact of weak home country institutions. The results support the notion that the monitoring, transparency, and visibility benefits brought about by equity cross-listings on U.S. exchanges are valuable to bond investors

Similarity in the restrictiveness of bond covenants

We examine the economic determinants and consequences associated with the inclusion of covenants with similar levels of restrictiveness in bond contracts. Using a unique Moody’s bond covenant dataset, we develop measures that capture similarity in the restrictiveness of bond covenants relative to previously issued peer bonds. We document that the demand for similarity by issuers, their advisors and bond investors follows the predictions of sociological and economic theories. Further, consistent with similarity in covenants reducing bond investors’ information acquisition and processing costs, we show that bonds with more similar covenant restrictiveness receive lower yields at issuance. These bonds are also more likely to be held by long-term bond investors, such as insurance companies, and are characterized by greater liquidity in the secondary market, providing a partial explanation for the lower bond yields. Our results highlight the benefits of covenant similarity and suggest that the use of covenants with similar restrictiveness levels brings information acquisition and processing cost savings that may be larger than the monitoring benefits provided by covenants with more tailored features

Development and Characterisation of Gastroretentive Solid Dosage Form Based on Melt Foaming

Dosage forms with increased gastric residence time are promising tools to increase bioavailability of drugs with narrow absorption window. Low-density floating formulations could avoid gastric emptying; therefore, sustained drug release can be achieved. Our aim was to develop a new technology to produce low-density floating formulations by melt foaming. Excipients were selected carefully, with the criteria of low gastric irritation, melting range below 70°C and well-known use in oral drug formulations. PEG 4000, Labrasol and stearic acid type 50 were used to create metronidazole dispersion which was foamed by air on atmospheric pressure using in-house developed apparatus at 53°C. Stearic acid was necessary to improve the foamability of the molten dispersion. Additionally, it reduced matrix erosion, thus prolonging drug dissolution and preserving hardness of the moulded foam. Labrasol as a liquid solubiliser can be used to increase drug release rate and drug solubility. Based on the SEM images, metronidazole in the molten foam remained in crystalline form. MicroCT scans with the electron microscopic images revealed that the foam has a closed-cell structure, where spherical voids have smooth inner wall, they are randomly dispersed, while adjacent voids often interconnected with each other. Drug release from all compositions followed Korsmeyer-Peppas kinetic model. Erosion of the matrix was the main mechanism of the release of metronidazole. Texture analysis confirmed that stearic acid plays a key role in preserving the integrity of the matrix during dissolution in acidic buffer. The technology creates low density and solid matrix system with micronsized air-filled voids

Corporate diversification and the cost of debt: The role of segment disclosures

Previous theoretical arguments suggest that industrial diversification provides a co-insurance effect that decreases the firm's default risk. In this paper, we endogenously estimate a firm's segment disclosure quality and investigate whether the quality of segment disclosures significantly affects bond investors' assessment of the co-insurance effect of diversification. We document that bonds issued by industrially diversified firms with high-quality segment disclosures have significantly lower yields than bonds issued by diversified firms with low-quality segment disclosures. We also find that the negative relation between industrial diversification and bond yields becomes stronger when firms improve segment disclosures as a result of FAS 131. Finally, we show that high-quality segment disclosures are associated with lower syndicated loan spreads for a subsample of loans issued by large bank syndicates, which are more likely to rely on publicly reported segment information