TY - JOUR
T1 - Pricing of off-balance sheet debt
T2 - How do bond market participants use the footnote disclosures on operating leases and postretirement benefit plans?
AU - Sengupta, Partha
AU - Wang, Zheng
PY - 2011/9
Y1 - 2011/9
N2 - In this study, we examine whether the public debt market prices information on off-balance sheet debt arising from operating leases and postretirement plans. We find that bond-rating agencies price off-balance sheet debt arising from operating leases and the coefficient on off-balance sheet debt measure of operating leases is similar to that of capital leases on the balance sheet. Regarding postretirement benefit plans, we find that bond-rating agencies do price postretirement benefit obligations that are reported in balance sheet but do not price such obligations disclosed in footnotes. We find similar results when we examine corporate bond yields on new debt issues. © 2010 The Authors. Accounting and Finance © 2010 AFAANZ.
AB - In this study, we examine whether the public debt market prices information on off-balance sheet debt arising from operating leases and postretirement plans. We find that bond-rating agencies price off-balance sheet debt arising from operating leases and the coefficient on off-balance sheet debt measure of operating leases is similar to that of capital leases on the balance sheet. Regarding postretirement benefit plans, we find that bond-rating agencies do price postretirement benefit obligations that are reported in balance sheet but do not price such obligations disclosed in footnotes. We find similar results when we examine corporate bond yields on new debt issues. © 2010 The Authors. Accounting and Finance © 2010 AFAANZ.
KW - Bond rating
KW - Bond yield
KW - Off-balance sheet financing
KW - Operating leases
KW - Postretirement benefits
UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-79960963868&origin=recordpage
UR - http://www.scopus.com/inward/record.url?scp=79960963868&partnerID=8YFLogxK
U2 - 10.1111/j.1467-629X.2010.00368.x
DO - 10.1111/j.1467-629X.2010.00368.x
M3 - RGC 21 - Publication in refereed journal
SN - 0810-5391
VL - 51
SP - 787
EP - 808
JO - Accounting and Finance
JF - Accounting and Finance
IS - 3
ER -