We characterize equilibrium leverage dynamics in a tradeoff model when the firm can continuously adjust leverage and cannot commit to a policy ex ante. While the leverage ratchet effect leads shareholders to issue debt gradually over time, asset growth and debt maturity cause leverage to mean revert slowly towards a target. Investors anticipate future debt issuance and raise credit spreads, fully offsetting the tax benefits from new debt. Shareholders are consequently indifferent toward the debt maturity structure, even though their choice may have a significant effect on credit spreads, leverage levels, the speed of adjustment, future investment and growth.