Download This PaperBank Loan Announcement Effects: Evidence from a Comprehensive 8-K Sample
Accepted: Journal of Financial and Quantitative Analysis
62 Pages Posted: 17 Dec 2019 Last revised: 10 Jan 2024
Date Written: December 30, 2023
Abstract
We investigate whether bank loan financing from 1994 to 2018 conveys valuable private information using a sample of over 10,000 bank loan announcements identified from 8-K filings. We show that the positive announcement effect is persistent and closely related to the information revealed in loan characteristics: The effect is stronger when deals have higher materiality, more favorable pricing, larger lead bank shares, and higher syndicate concentration. The effect is also stronger when lenders have higher credit quality and when credit market conditions are worse. The insignificant wealth effect documented in several early studies is potentially driven by small sample size.
Keywords: Bank Loan Announcement; Big Data; 8-K Filings; SEC Form 8-K Disclosure Rules; Information Asymmetry
JEL Classification: G14; G18; G21; G32
Suggested Citation: Suggested Citation