The Determinants of Recovery Rates on Defaulted Corporate Securities: Why do Fallen Angels recover more than Original High Yield Issues?

Regression analysis has shown that recovery rates are determined by a variety of conditions at the time of default. These conditions can be broken into five major categories: (1) a security's seniority within the capital structure of the defaulting firm, (2) the type of default event, (3) firm-specific factors, (4) industry-specific factors, and (5) macroeconomic factors. Expectations of these inputs determine the expected recovery rate if default were to occur, thereby determining credit ratings and security prices. Although it is widely understood how recovery rate estimates influence credit rating assignments (the higher the expected recovery rate, the higher the assigned credit rating), no research, to the best of my knowledge, has investigated the reasons why higher rated securities recover more than lower rated securities in the event of default. Specifically, this paper will empirically investigate why securities originally rated investment grade, fallen angels, recover more than securities originally rated high yield in the event of default.

Building an Interactive, Three-dimensional Virtual World

The movement of graphics and audio programming towards three dimensions is to better simulate the way we experience our world. In this project I looked to use methods for coming closer to such simulation via realistic graphics and sound combined with a natural interface. I did most of my work on a Dell OptiPlex with an 800 MHz Pentium III processor and an NVIDlA GeForce 256 AGP Plus graphics accelerator -high end products in the consumer market as of April 2000. For graphics, I used OpenGL [1], an open·source, multi-platform set of graphics libraries that is relatively easy to use, coded in C . The basic engine I first put together was a system to place objects in a scene and to navigate around the scene in real time. Once I accomplished this, I was able to investigate specific techniques for making parts of a scene more appealing.