■ Clawback provision allows issuer to access capital desperately needed but it is costly. ■ Bonds with clawbacks command higher yields – about 80 bps higher, than comparable bonds.
■ Firms facing temporary capital constraints are more likely to exercise the clawback. ■ Constrained firms unable to realize better prospects often renegotiate high cost IPOC.
Gabriel G. Ramírez, Professor of Finance
Made with FlippingBook - Online catalogs