• Robin Greenwood
  • Samuel Hanson


Issuer Quality and Corporate Bond Returns. Robin Greenwood, Samuel G. Hanson, February 2013, Paper. "We show that the credit quality of corporate debt issuers deteriorates during credit booms, and that this deterioration forecasts low excess returns to corporate bondholders. The key insight is that changes in the pricing of credit risk disproportionately affect the financing costs faced by low quality firms, so the debt issuance of low quality firms is particularly useful for forecasting bond returns. We show that a significant decline in issuer quality is a more reliable signal of credit market overheating than rapid..." Link verified August 21, 2014