Bank Loan Announcement Effects — Evidence from a Comprehensive 8-K Sample
Allied Social Sciences Association ASSA/AEA 2021 Poster
72 Pages Posted: 17 Dec 2019 Last revised: 19 May 2022
Date Written: May 18, 2021
Using a comprehensive sample of over 10,000 bank loan announcements identified from 8-K filings during 1994-2018, we show that bank loan financing continues to convey valuable private information as the regulatory environment changes over time. The positive loan announcement effects are stronger when deals are more material and reveal positive news about firms' financial conditions, when lenders have higher credit quality, and when the credit market condition is tight. Based on a sample that better represents the loan universe, we provide new evidence on the determinants of loan announcement decisions and address the sample misrepresentation concerns raised by previous studies.
Keywords: Bank Loan Announcement; Big Data; 8-K Filings; SEC Form 8-K Disclosure Rules; Dodd-Frank Act
JEL Classification: G14; G18; G21; G32
Suggested Citation: Suggested Citation