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Market reaction to published and non-published corporate loan announcements
Journal article   Peer reviewed

Market reaction to published and non-published corporate loan announcements

J. Fery, D. Gasbarro, D.R. Woodliff and J.K. Zumwalt
The Quarterly Review of Economics and Finance, Vol.43(1), pp.1-10
2003
DOI: https://doi.org/10.1016/S1062-9769(02)00118-7
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Abstract

Prior research examining the role of financial intermediaries in reducing the problems of information asymmetry has reported that borrowers experience a positive share price reaction to credit agreement announcements. However, it is generally acknowledged that these studies have the potential for a reporting bias because they use only one source of information for credit agreement announcements. To examine this reporting bias, we distinguish between “published” and “non-published” announcements in Australia. We find that borrowers’ share prices react positively to announcements that are published in both the financial press and by a dedicated information provider. No statistically significant reaction is observed for the non-published credit agreements.

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