An important advantage of secured relative to unsecured debt is that it provides better protection against dilution from other creditors of the firm. While covenants may provide unsecured lenders protection from dilution arising from the issuance of additional debt, they are less likely to be...

Priority spreading refers to the practice of firms increasing their reliance on secured and subordinated debt and reducing their reliance on senior debt as their credit quality deteriorates. We argue that priority spreading occurs, in part, because security provides creditors with greater...

Recent studies use retrospective automated valuation models (AVMs) to investigate whether appraisals of collateral values associated with securitized residential mortgage loans were systematically inflated during the recent housing boom. In this paper, we provide evidence that high AVM pricing...