THE DETERMINANT OF DEBT MATURITY IN SELECTED NIGERIAN FIRMS

ABSTRACT
The study therefore examined the determinants of debt maturity in selected
Nigerian firms. The study evaluated the determinants of debt maturity of selected
firms in Nigeria using the following variable: independent variables; firm size,
firm leverage, firm’s asset maturity and firm credit quality and dependent variable
debt maturity. The study is set out to: ascertain the nature of relationship between
firm’s size (x1) and debt maturity (Y); establish the nature of relationship between
the firm’s leverage (x2) and debt maturity (Y); establish the nature of relationship
between firm’s asset maturity (x3) and debt maturity (Y); establish the nature of
relationship between firm’s credit quality (x4 ) and debt maturity (Y). The study
utilised secondary data.

Given the nature of the objectives and hypotheses of the
research, the data were extracted from the published report of some quoted firms’
annual reports. The period for the study was 2007 – 2011. The population of the
study was 241 firms quoted in Nigeria stock exchange as at 2011, while the sample
size, using purposive sample size, were eight (8) firms. Correlation coefficient
technique and coefficient of multiple determinations (R – Square), were used to
analyze the objectives while t_ statistics was used for statistical significance.
Result from the regression equations showed that the coefficients of firm’s size and
firm’s asset maturity have a positive impact on the dependent variable debt
maturity with values 0.065 and 0.559 respectively; also, firm’s leverage and firm’s
credit quality have negative impact on the dependent variable debt maturity with
values -0.414 and -0.112 respectively. The R – Square of the independent variables
with the dependent variable is 0.441. This shows a positive relationship between
independent variable with the dependent variable. However, the t_ statistical test
for firm’s size has significant impact on debt maturity (t1 = 0.368 < 2.132), that of
firm’s leverage has no significant impact on Y (t2 = -2.417<2.132). The statistical
coefficient of firm’s asset maturity has a significant impact on debt maturity (t3 =
4.080 >2.132), and that of firm’s credit quality has no significant impact on debt
maturity (t2 = -0.057 < 2.132).
We concluded that firm’s asset maturity is the only significant variable in
forecasting the debt maturity, (Y), therefore recommend that firms in Nigeria
should use asset maturity as a proxy in the determination of their debt maturity.

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