The market reaction to debt announcements : UK evidence surrounding the global financial crisis
Marshall, Andrew and McCann, Laura and McColgan, Patrick (2019) The market reaction to debt announcements : UK evidence surrounding the global financial crisis. British Accounting Review, 51 (1). pp. 92-109. ISSN 0890-8389 (https://doi.org/10.1016/j.bar.2018.04.001)
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Abstract
We examine the stock market response to announcements of public, bank and privately placed debt issuance by large UK firms surrounding the global financial crisis of 2008. Prior to the crisis, we find that stock prices respond positively to announcements of bank debt issuance only. This is restricted to the sub-sample of syndicated bank loans and this is suggestive of the certification from multiple lenders conveying a signal of creditworthiness. We find that abnormal returns on the announcement of bank loans have declined since the financial crisis, both in absolute terms and in comparison to alternative borrowing sources. Overall, our results suggest that surrounding the global financial crisis of 2008, bank loans have become less informative as a signal of the creditworthiness of borrowing firms.
ORCID iDs
Marshall, Andrew ORCID: https://orcid.org/0000-0001-7081-1296, McCann, Laura and McColgan, Patrick ORCID: https://orcid.org/0000-0002-7980-6175;-
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Item type: Article ID code: 63762 Dates: DateEvent31 January 2019Published20 April 2018Published Online16 April 2018AcceptedSubjects: Social Sciences > Commerce > Accounting Department: Strathclyde Business School > Accounting and Finance Depositing user: Pure Administrator Date deposited: 17 Apr 2018 14:33 Last modified: 12 Dec 2024 06:34 Related URLs: URI: https://strathprints.strath.ac.uk/id/eprint/63762