Download or read book Covenant Structure in Corporate Spin-offs written by Robin Zehnder and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This bachelor thesis investigates how corporate spin-offs influenced abnormal returns, debt covenant ratios, covenant types, information asymmetry, and CEO behavior between 2005 and 2015. For this purpose, covenant ratios were collected from a sample of 111 spin-off executions and a sample of peers. The author found that there is a positive cumulative abnormal return at the time of the spin-off announcement. In addition, the author found that spin-off executions lead to significantly less restrictive debt covenant ratios and performance covenants were far more desired than capital covenants. Although very few CEOs of the pre-spin-off parent companies became CEO of the spin-off company, low minimum required fixed-charge coverage ratios might be an incentive for the CEO to do so.