Credit information quality is uncertain and varies across debt maturity. An ambiguity-averse rm manager should avoid ambiguous maturities. We hypothesize that firms choose maturity structures to reduce perceived credit quality uncertainty. Empirical results strongly support the hypothesis using statistical proximity measures of firm survival probabilities predicted by credit rating agencies. Even when short-term debt is cheaper, corporations are likely to increase long-term borrowing if its credit-quality ambiguity is lower (and vice versa). Higher credit-quality ambiguity in short-term (long-term) bonds significantly predicts decreases (increases) in short-term debt fraction. The findings are robust to various credit ambiguity measures and credit quality controls.

Keywords: Ambiguity, Corporate Bond, Debt Structure

JEL Classification: G12, G14, G24​