TY  - UNPD
A1  - Randl, Otto
A1  - Zechner, Josef
T1  - Sovereign reputation and yield spreads: a case study on retroactive legislation
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 545
N2  - This paper uses recent legislation in Austria to establish a link between sovereign reputation and yield spreads. In 2009, Hypo Alpe Adria International, a bank previously co-owned by the regional government of Carinthia, had been nationalized by Austria’s central government in order to avoid a default triggering multi-billion Euro local government guarantees. In 2015, special legislation retroactively introduced collective action clauses allowing a haircut on both the bonds and the guarantees while avoiding formal default. We document that legislative and administrative action designed to partly abrogate the guarantees resulted in a loss of reputation, leading to higher yield spreads for sovereign debt. Our analysis of covered bonds uncovers an increase in yield spreads on the secondary market and a deterioration of primary market conditions.
T3  - CFS working paper series - 545 
Y1  - 2016
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/41684
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-416841
UR  - https://ssrn.com/abstract=2853354
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -