JOBS Act Spillover Effects in the Syndicated Loan Market

46 Pages Posted: 9 Feb 2017 Last revised: 12 Feb 2019

See all articles by Matthew T. Billett

Matthew T. Billett

Indiana University - Kelley School of Business - Department of Finance

Chiyoung Cheong

Indiana University - Kelley School of Business - Department of Finance

Sudip Gupta

Johns Hopkins University

Date Written: February 2019

Abstract

The JOBS Act directly affects access to public equity for emerging growth companies (EGCs) by lowering regulatory requirements to conduct initial public offerings (IPOs). Indirectly, improved access to equity markets may alter how other capital providers engage with EGC firms, which may further accelerate EGC firm growth, regardless of and prior to IPO. Using regression discontinuity, we find syndicated loans to EGCs have lower credit spreads, less collateral, larger revolvers, and greater bank participation. These results suggest the JOBS Act not only has a direct effect via IPO access, but also indirectly enhances EGCs’ access to the syndicated loan market.

Keywords: JOBS Act, Syndicated Lending, Initial Public Offering, Loan, Bank Relationship

JEL Classification: G21, G24, G32, G38, K22

Suggested Citation

Billett, Matthew T. and Cheong, Chiyoung and Gupta, Sudip, JOBS Act Spillover Effects in the Syndicated Loan Market (February 2019). Kelley School of Business Research Paper No. 17-14, Available at SSRN: https://ssrn.com/abstract=2913788 or http://dx.doi.org/10.2139/ssrn.2913788

Matthew T. Billett

Indiana University - Kelley School of Business - Department of Finance ( email )

1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-3366 (Phone)

Chiyoung Cheong (Contact Author)

Indiana University - Kelley School of Business - Department of Finance ( email )

1309 E. 10th St.
Bloomington, IN 47405
United States

Sudip Gupta

Johns Hopkins University ( email )

Baltimore, MD 20036-1984
United States

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