【文章內(nèi)容簡介】 ucture。 however, they do not consider dynamic deterioration in the firm’s credit quality. In DeMarzo and Fishman (2020), agents draw down on credit lines when cash flows are insufficient to pay debt coupons. However, there are no dynamic models to our knowledge that derive both an increase in secured and subordinated debt as a percentage of total debt, . the spreading of the debt structure that we find as credit quality deteriorates. Figure 1 presents our first main result on the relation between credit quality and debt structure:firms lower in the credit quality distribution spread the priority structure of their debt obligations. While investment grade firms rely uniquely on senior unsecured debt and equity, speculative grade firms rely on a bination of secured bank debt, senior unsecured debt, subordinated convertibles and bonds, and equity. Table 4 presents estimates of these patterns in a regression context. In Panel A, the left hand side variables are the debt priority class amounts scaled by total debt. The omitted credit quality group is firms rated A or better. As the coefficients show, speculative grade firms have a much higher fraction of their debt in secured and subordinated obligations. The magnitude is economically significant: secured and subordinated debt as a fraction of total debt is more than 50% higher for firms with a B rating than for firms with a rating of A or better. In Panel B, the left hand side variable for each regression is the debt priority class amount scaled by total capitalization.: lower credit quality firms use a substantially higher fraction of secured and subordinated debt in their capital structure. Once again, the magnitudes are striking: the bination of secured and subordinated debt as a fraction of total capital structure is higher by more than 40% for Brated firms pared to firms rated A or higher. Meanwhile, senior unsecured debt actually decreases in the capital structure despite the fact that total debt increases. Naturally the decrease in senior unsecured is smaller when scaled by total capitalization than by total debt. This reflects the fact that lower credit quality firms use more total debt and less equity. In other words, as firms move down the credit quality distribution, they replace senior unsecured debt and equity with secured bank debt and subordinated debt. This finding is also evident in Panel A of Figure in the introduction. Using a novel data set on the debt structure of a large sample of rated public firms, we show that debt heterogeneity is a first order aspect of firm capital structure. The majority of firms in our sample simultaneously use bank and nonbank debt, and we show that a unique focus on leverage ratios misses important variation in security issuance decisions. Furthermore, crosssectional correlations between traditional determinants of capital structure (such as profitability) and different debt types are heterogeneous. These findings suggest that an understanding of corporate capital structure necessitates an understanding of how and why firms use multiple types, sources, and priorities of corporate debt. We then examine debt structure across the credit quality distribution. We show that firms of lower credit quality have substantially more spreading in their priority structure, using a multitiered debt structure often consisting of both secured and subordinated debt issues. We corroborate these results in a separately collected dataset for firms that experi