قیمت گذاری اوراق قرضه در بزرگترین ورشکستگی شهر در تاریخ: تاثیر قوانین مدیریت اورژانس دولتی بر ریسک پیش فرض

This study investigates the returns to bondholders around important events in the Detroit bankruptcy that impacted market expectations of recoveries on the City’s debt. It illustrates how stricter State interference in the financial affairs of a distressed local government can increase the likely payoff to that entity’s own creditors. However, such interventions are also shown to potentially raise the default risk of economically related municipalities. Further investigations indicated that increases in Michigan’s emergency management powers did not positively impact the returns on a broad sample of distressed municipal bonds in Michigan nor improve the overall credit quality of the State and its political subdivisions.