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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26092
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| Title: | Innovation in International Law and Global Finance: Estimating the
Financial Impact of the Cape Town Convention |
| Authors: | Walter, Ingo
Saunders, Anthony
Srinivasan, Anand |
| Keywords: | Law and finance
secured lending
aircraft finance
leasing
sovereign risk
asset securitization |
| Issue Date: | 2006 |
| Series/Report no.: | EC-06-30 |
| Abstract: | This paper examines the financial impact of a transfer of legal
sovereignty covering the rights to collateral to an international regime
in the case of the Cape Town Convention and Protocol covering
international mobile assets, specifically commercial aircraft and
related equipment, which came into force in 2004. We estimate the impact
on financing costs facing airlines based in signatory countries in terms
of access to financial markets and interest differentials, debt rating
migration and stock prices using rating-sensitivity analysis, OLS
regressions and event studies. We find that the present value of the
resulting financing cost reductions are very significant and are biased
in favor of developing countries, the sources of much of the growth in
demand for commercial aircraft going forward. The results suggest the
power of changes in the legal framework of financial markets to
influence the costs and pricing of global financial flows. |
| URI: | http://hdl.handle.net/2451/26092 |
| Appears in Collections: | Economics Working Papers
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