Abstract:Purpose-This study aims to identify the relationship between the use of financial covenants and the cost of borrowing via bonds issued by firms in Brazil. Design/methodology/approach-The sample comprised 269 bond series issued by 106 publicly-listed companies from 2010 to 2016. Covenants were sampled manually from the indentures and prospectuses of these issues. A distinction was made between covenants that must be fulfilled by the firm issuing the debt and those that create obligations for another firm that h… Show more
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