Bond Market Reaction to Untimely Filings of 10-K and 10-Q Reports
45 Pages Posted: 20 Sep 2017 Last revised: 23 Oct 2018
Date Written: September 18, 2017
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: Suggested Citation