Bank Loan Announcement Effects — Evidence from a Comprehensive 8-K Sample

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

Ho, Steven Wei and Liu, Clark and Wang, Shujing, Bank Loan Announcement Effects — Evidence from a Comprehensive 8-K Sample (May 18, 2021). PBCSF-NIFR Research Paper, Allied Social Sciences Association ASSA/AEA 2021 Poster, Available at SSRN: https://ssrn.com/abstract=3480906 or http://dx.doi.org/10.2139/ssrn.3480906