2013 Awards for Excellence

Citation

Stewart, L.J. (2014), "2013 Awards for Excellence", Qualitative Research in Financial Markets, Vol. 6 No. 1. https://doi.org/10.1108/QRFM-04-2014-0041

2013 Awards for Excellence

Article Type: 2013 Awards for Excellence From: Qualitative Research in Financial Markets, Volume 6, Issue 1

The following article was selected for this year’s Outstanding Paper Award for Qualitative Research in Financial Markets

"The 2008 auction rate securities market collapse and US nonprofit health systems"

Louis J. Stewart
Accounting and Business Law Department, Howard University, Washington, District of Columbia, USA
Pamela C. Smith
Department of Accounting, The University of Texas at San Antonio, San Antonio, Texas, USA

Purpose – This paper examines the 2008 collapse of the US tax-exempt auction rate securities (ARS) market, from the perspective of not-for-profit auction rate debt issuers.
Design/methodology/approach – The authors use a multiple case study methodology to examine the financial and operating impact of ARS auction failures on three US nonprofit hospitals and health systems. The analysis is based solely on information drawn from publicly-available documents.
Findings – The three case study subjects issued more than $411 million in ARS. These securities were issued with bond insurance and fixed payer interest rate derivatives. The 2008 global financial crisis resulted in millions of dollars in drastically increased interest costs, costly debt refunding and derivative-related collateral postings. It was also found that the ability of an individual ARS issuer to respond effectively to these capital market-related shocks is related to three key factors – profitability, liquidity and perceived credit quality.
Research limitations/implications – The reliance on a case study methodology may limit the authors’ ability to generalize the findings to the hundreds of other US nonprofit ARS issuers.
Practical implications – Nonprofit financial executives must learn to adequately assess their organization’s risk exposures if innovative long-term capital financing instruments are to be used in the future. These potential costs, as well as any ineffectively hedged interest cost exposure, must be considered and weighed against any potential interest cost saving associated with any future debt financing arrangements.
Originality/value – The paper measures the financial and operating impact of the highly publicized 2008 ARS market collapse on nonprofit ARS issuers.

Keywords: Auction rate securities, Financial markets, Global financial markets crisis, Health care, Nonprofit organizations, Tax exempt bonds, United States of America

http://www.emeraldinsight.com/10.1108/QRFM-04-2014-001

This article originally appeared in Volume 4 Number 1, 2012. Qualitative Research in Financial Markets

The following article was selected for this year’s Highly Commended Award

“The influence of affect on stock price volatility: new theory and evidence”

Robert A. Olsen

This article originally appeared in Volume 4 Number 1, 2012, Qualitative Research in Financial Markets