Innovation in International Law and Global Finance: Estimating the Financial Impact of the Cape Town Convention
37 Pages Posted: 13 Oct 2008
There are 4 versions of this paper
Innovation in International Law and Global Finance: Estimating the Financial Impact of the Cape Town Convention
Innovation in International Law and Global Finance: Estimating the Financial Impact of the Cape Town Convention
Innovation in International Law and Global Finance: Estimating the Financial Impact of the Cape Town Convention
Innovation in International Law and Global Finance: Estimating the Financial Impact of the Cape Town Convention
Date Written: 2006
Abstract
This paper examines the financial impact of a transfer of legal sovereignty covering the rights to collateral to an international regime in the case of the Cape Town Convention and Protocol covering international mobile assets, specificallycommercial aircraft and related equipment, which came into force in 2004. We estimate the impact on financing costs facing airlines based in signatory countries in terms of access to financial markets and interest differentials, debt rating migration and stock prices using rating-sensitivity analysis, OLS regressions and event studies. We find that the present value of the resulting financing cost reductions are very significant and are biased in favor ofdeveloping countries, the sources of much of the growth in demand for commercial aircraft going forward. The results suggest the power of changes in the legal framework of financial markets to influence the costs and pricing of global financial flows.
Keywords: Law and finance, secured lending, aircraft finance, leasing, sovereign risk, asset securitization
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Evolution of Buyout Pricing and Financial Structure
By Steven N. Kaplan and Jeremy C. Stein
-
By Gregor Andrade and Steven N. Kaplan
-
By Steven N. Kaplan and Gregor Andrade
-
The Voting Prohibition in Bond Workouts
By Mark J. Roe
-
The Determinants of Professional Fees in Large Bankruptcy Reorganization Cases
By Lynn M. Lopucki and Joseph W. Doherty
-
Financial Distress and Bank Lending Relationships
By Sandeep Dahiya and Anand Srinivasan
-
By Andrei Shleifer and Robert W. Vishny
-
Corporate Financial Distress and Bankruptcy: A Survey
By Lemma W. Senbet and Tracy Yue Wang