Corporate restructurings and the effect of ownership concentration on bond recovery rates : an empirical study of recovery rates in the Norwegian high yield bond market

Joakim, Olav; Skjæret, Andreas
Master thesis
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http://hdl.handle.net/11250/2487889
Date
2017
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Abstract
This study examines the effect of ownership concentration on recovery rates for 112 defaulted

high yield bonds issued by Norwegian firms. We find evidence suggesting that concentrated

ownership in the hands of the firm’s largest owner negatively affects bond recovery for secured

bonds. The effect is insignficant for unsecured bonds. This suggests that large shareholders

reduce bond recovery rates by a transfer of value in the negotiation process during financial

reorganizations. Large shareholders have greater incentive to use their bargaining power in

negotiations, compared to small shareholders.