Debt conservatism and debt-equity choices: evidence from REITs’ unused debt capacity
We infer debt conservatism behavior by examining how REITs adjust towards their debt capacity following a capital issue or repurchase decision. It is observed that REITs with high unused debt capacity tend to issue equity which renders them more under lever aged for at least two consecutive years. T...
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| Main Author: | |
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| Format: | Article |
| Language: | English |
| Published: |
Universiti Utara Malaysia
2017
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| Online Access: | http://repo.uum.edu.my/26255/1/IJBT%2013%201%202017%201%2028.pdf http://repo.uum.edu.my/26255/ http://ijbf.uum.edu.my/index.php/previous-issues/161-the-international-journal-of-banking-and-finance-ijbf-volume-13-no-1-2017 |
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| Institution: | Universiti Utara Malaysia |
| Language: | English |
| Summary: | We infer debt conservatism behavior by examining how REITs adjust towards their debt capacity following a capital issue or repurchase decision. It is observed that REITs with high unused debt capacity tend to issue equity which renders them more under lever aged for at least two consecutive years. These high debt buffer REITs also tend to converge slowly towards their debt capacity through repurchase decisions
and hold significantly higher unused debt facilities than their low buffer counterparts. These findings are robust to a variety of robustness checks and
cannot be explained by the traditional pecking order and trade-off theories of capital structure. |
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