Role of Institutional Investors - Evidence from the Foreign “Rule 144A” Debt Market

51 Pages Posted: 13 Dec 2015 Last revised: 4 Nov 2019

See all articles by Alan Guoming Huang

Alan Guoming Huang

University of Waterloo

Madhu Kalimipalli

Lazaridis School of Business and Economics, Wilfrid Laurier University

Subhankar Nayak

Wilfrid Laurier University - Financial Services Research Centre

Latha Ramchand

University of Houston

Date Written: October 28, 2019

Abstract

In this paper, we examine the unique role played by institutional investors in the private corporate debt market for Rule 144A debt. We use the Global financial crisis as a quasi-natural experiment to study how qualified institutional buyers (or QIBs) facilitated funding to the foreign debt issuers in U.S. Using an exhaustive sample of foreign bond issuances in the U.S. from over 65 countries between 1990 and 2013, we examine (a) corporate decisions involving debt choice and market timing, and (b) determination of offer spreads. Our findings collectively support the notion that QIBs enabled funding in the foreign 144A debt market despite the financial crisis.

Keywords: Foreign 144A issues, Yankee bonds, QIBs, financial crisis

JEL Classification: G10, G14 G15, G30

Suggested Citation

Huang, Alan G. and Kalimipalli, Madhu and Nayak, Subhankar and Ramchand, Latha, Role of Institutional Investors - Evidence from the Foreign “Rule 144A” Debt Market (October 28, 2019). Available at SSRN: https://ssrn.com/abstract=2702547 or http://dx.doi.org/10.2139/ssrn.2702547

Alan G. Huang

University of Waterloo ( email )

School of Accounting and Finance
Waterloo, Ontario N2L 3G1
Canada
519-888 4567 ext. 36770 (Phone)

Madhu Kalimipalli (Contact Author)

Lazaridis School of Business and Economics, Wilfrid Laurier University ( email )

Waterloo, Ontario N2L 3C5
Canada
519-884-0710 (Phone)

HOME PAGE: http://www.madhukalimipalli.com/

Subhankar Nayak

Wilfrid Laurier University - Financial Services Research Centre ( email )

Waterloo, Ontario N2L 3C5
Canada

Latha Ramchand

University of Houston ( email )

Houston, TX 77204
United States
713-743-4769 (Phone)

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