We examine how heterogeneity in institutional equity ownership affects bondholders. Firms with larger short-term (long-term) institutional ownership are associated with higher (lower) future bond yield spreads. The adverse effect of short-term ownership on bond pricing is driven by issuing firms...

In contrast to prior equity market results, we document that corporate bonds issued by low profitability firms outperform bonds issued by highly profitable firms. This performance difference is primarily driven by low profitability, low credit rating firms. This profitability premium is...

Bank attention plays an important role in the pricing of corporate debt. Prior studies show that bank loans serve as certification and monitoring mechanisms that signal firm quality to bond markets. To separate continuous monitoring effects from certification effects, we use a measure of bank...