Bond Market Reaction to Untimely Filings of 10-K and 10-Q Reports

45 Pages Posted: 20 Sep 2017 Last revised: 23 Oct 2018

See all articles by Samer Khalil

Samer Khalil

Concordia University, Quebec - John Molson School of Business

Sattar Mansi

Virginia Polytechnic Institute & State University

Mohamad Mazboudi

American University of Beirut

Andrew (Jianzhong) Zhang

University of Nevada, Las Vegas - Department of Finance

Date Written: September 18, 2017

Abstract

We examine the consequences of untimely filings of forms 10-K and 10-Q in the bond market. Using publicly traded bond data covering the period from January 2000 to December 2012, we find that the bond market reacts negatively to late filing announcements of 10-Ks and 10-Qs. We also find that the use of covenants exacerbates the market reaction to the delayed filing, and that late-filing firms are likely to experience credit rating downgrades in the ensuing six- to twelve-month period. We use an identification strategy based on matched sample analysis that separates the delayed filing per se, from the economic cause of late filing to confirm our findings. The results provide evidence that the timeliness of public disclosure is an important consideration in the pricing of corporate public debt.

Keywords: Untimely Filing, Corporate Public Disclosures, Credit Market, Covenants, Bond Ratings

JEL Classification: G12, G14

Suggested Citation

Khalil, Samer and Mansi, Sattar and Mazboudi, Mohamad and Zhang, Andrew (Jianzhong), Bond Market Reaction to Untimely Filings of 10-K and 10-Q Reports (September 18, 2017). Journal of Business Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3038837 or http://dx.doi.org/10.2139/ssrn.3038837

Samer Khalil

Concordia University, Quebec - John Molson School of Business ( email )

1455 de Maisonneuve Blvd. W.
Montreal, Quebec H3G 1M8
Canada

Sattar Mansi (Contact Author)

Virginia Polytechnic Institute & State University ( email )

Mohamad Mazboudi

American University of Beirut ( email )

Olayan School of Business
PO Box 11-0236 Riad El Solh
Beirut
Lebanon
(961)1350000 (Phone)

Andrew (Jianzhong) Zhang

University of Nevada, Las Vegas - Department of Finance ( email )

4505 S. Maryland Parkway
Box 456008
Las Vegas, NV 89154-6008
United States

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