Debt Maturity and the Use of Short-Term Debt: Evidence form Sovereigns and Firms

Author: Sophia Chen, Mrs. Paola Ganum, Lucy Qian Liu, Mr. Leonardo Martinez, and Mr. Maria Soledad Martinez Peria

Maturity structure of debt can have financial and real consequences. Short-term debt exposes borrowers to rollover risk and is associated with financial crises.

Volume/Issue: Volume 2019 Issue 001

Publication date: February 2019

ISBN: 9781484380536

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Topics covered in this book

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Money and Monetary Policy , Public Finance , DPPP , DP , short-term debt , maturity , debt maturity , EMDEs , debt , use of short-term debt , average weighted maturity , maturity structure , currency tradeoff , government bond , short-term debt debt ratio , World Bank debt statistics , ratio in AEs , debt dilution problem , bond issuance , weighted average maturity , Syndicated loans , Currencies , Loans , Bonds , Global

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Summary

The maturity structure of debt can have financial and real consequences. Short-term debt exposes borrowers to rollover risk (where the terms of financing are renegotiated to the detriment of the borrower) and is associated with financial crises. Moreover, debt maturity can have an impact on the ability of firms to undertake long-term productive investments and, as a result, affect economic activity. The aim of this paper is to examine the evolution and determinants of debt maturity and to characterize differences across countries.