For large issuers, the favorable accounting treatment and fiat-parity redemption revenue could improve credit ratings enough to save as much as $440 million a year in interest through debt refinancing.
Source quote, verbatim
For large firms, the favorable accounting treatment could result in annual savings of up to $440 million through debt refinancing, as enhanced credit ratings lower interest expenses.
Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025). SSRN: https://ssrn.com/abstract=5583610
Holds when
large issuers with substantial loyalty programs and $25 to $40 billion debt loads
credit rating improvement of one to two notches
Classification
empiricalsupport: arguedeconomics
Related claims
restateskaal:claim:5454054-009 Because LER voucher redemptions generate revenue at fiat parity, they can improve issuer credit ratings and lo...
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