Laughing about the financial creators in the financial field
The central bank changes the yield curve by adjusting the short-term interest rate, which ultimately affects the long-term investment cost and achieves the policy goal of stabilizing prices and employment. As a tool of price-based monetary policy, interest rate policy will change the shape of yield curve, affect the relative cost of financing in different maturities and the tax shield value of debt, and finally change the maturity of debt. If the central bank's monetary policy makes the yield curve steeper and the long-term and short-term spreads wider, then the relative cost of short-term debt will be reduced and enterprises may use short-term debt financing more. However, the impact of the term structure of interest rate on the term structure of debt may be affected by the tax environment of enterprises. If monetary policy makes the yield curve steep, the cost of long-term debt will be higher, but the interest tax shield of long-term debt will be greater. Therefore, for those enterprises with high tax rates, the expansion (or contraction) of long-term and short-term spreads will make them more inclined to use long-term (or short-term) debts. If the overall credit supply of the economy is sufficient and the financing environment of enterprises is relaxed, enterprises will have the incentive to choose those relatively cheaper financing methods-short-term debt. If the credit supply is tightened, enterprises will worry about the risk of refinancing in the future, so they will tend to use longer-term debt. The specific impact of the total credit policy on the debt maturity will also be affected by the financial system structure. In the financial system that relies more on banks, financial institutions can smooth their risks and benefits in different economic environments through "relationship loans" with relatively long term; Moreover, the negotiation cost between enterprises and financial institutions on debt extension and refinancing will be lower, and banks will be more willing to provide long-term debt financing. In these economies, even if the total amount of credit shrinks, the risk of corporate refinancing will not be too prominent, so the overall structure of corporate debt maturity will not change much. If the financial system relies more on the financial market, creditors cannot smooth short-term credit losses through long-term interaction, and the cost of debt renegotiation between enterprises and decentralized creditors will be higher. Therefore, in the face of credit contraction, creditors will be more willing to provide short-term financing for fear of future prospects, thus shortening the debt maturity of enterprises. In most economies, commercial banks, as the most important financial intermediaries, realize the term conversion of funds by absorbing residents' short-term savings and issuing longer-term loans.
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What are the factors that affect the term structure of corporate debt? -legal knowledge | legal map
1. What are the factors that affect the term structure of corporate debt? The factors that affect the debt maturity structure of a company include future growth opportunities, free cash flow, company size, existing asset maturity, company quality, information asymmetry and actual income.
2. The way of corporate debt restructuring