Sell-Side Debt Analysts
City University London - Sir John Cass Business School; Rice University - Jesse H. Jones Graduate School of Business
Southern Methodist University (SMU) - Edwin L. Cox School of Business
University of Miami - Department of Accounting
February 15, 2008
We study the determinants and market impact of sell-side debt research. Analyzing a sample of 5,920 debt reports published by fifteen brokerage firms from 1999 to 2004, we document that companies with a higher probability of financial distress, lower market-to-book ratio, larger debt, and higher leverage receive more debt research. In addition, we document higher frequency of debt reports around credit ratings downgrades and find that their publication impacts equity prices. The evidence enhances our understanding of the nature of the market forces shaping sell-side debt research and its effect on price formation.
Number of Pages in PDF File: 50
Keywords: Debt, Information Intermediaries, Distress, Analyst
JEL Classification: G14, G24, G29,
Date posted: March 25, 2007 ; Last revised: March 6, 2015
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