Type of Submission

Refereed Article


This paper examines the question of whether there are systematic differences in the cost of debt relative to rating standards between firms in the hospitality industry and firms in other industries. It also examines the impact of make-whole call provisions on the cost of debt. The make-whole call provision is a relatively recent innovation in the corporate bond market. We do find some evidence of a positive hospitality industry impact on bond yields. Additionally, the make-whole call provision appears to be valued by investors, reducing the investor loss from early bond redemption in a period of declining interest rates.