Traditional corporate bond pricing models have had limited success in explaining actual corporateyield spreads. While research conducted over the past decade has substantially improved ourunderstanding of the pricing the corporate debt and the corporate bond markets in general, a numberof important questions remain. What are potential risk factors priced in corporate bonds? How dochanges in model assumptions affect the explanatory power of bond pricing models? What is therole played by information in determining corporate yield spreads? How important is liquidity forcorporate bond issuers? How do various regulations affect the pricing of corporate debts and whatare the potential channels? This special issue of the Journal of Risk and Financial Management onCorporate Debt includes six interesting papers that help address these questions.
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