Information Spillover through Private Lender Reports

42 Pages Posted: 13 May 2020 Last revised: 15 May 2020

See all articles by Abe de Jong

Abe de Jong

Monash University; University of Groningen; European Corporate Governance Institute (ECGI)

Tim Kooijmans

RMIT University

Chris Veld

Monash University

Date Written: May 15, 2020


This paper examines private information spillover from the lending market to markets for public securities. We find that information from private monthly reports to institutional lenders gradually spills over to the public equity market. We observe positive abnormal stock returns after firms provide favorable private reports. After unfavorable private reports, we find negative abnormal returns, as well as increased short interest. This private information leakage is striking and previously undocumented. We demonstrate how traders benefit from private information, as we show that they do not trade immediately upon receiving the private information. Instead, they time their trades to manage both the price impact and the risk of additional information arrival before the scheduled public release of their private information.

Keywords: Private information, Covenants, Information spillover, Private debt

JEL Classification: M41, G32

Suggested Citation

de Jong, Abe and Kooijmans, Tim and Veld, Chris, Information Spillover through Private Lender Reports (May 15, 2020). Available at SSRN: or

Abe De Jong (Contact Author)

Monash University ( email )

900 Dandenong Rd
Room H3-56
Caulfield East, Victoria 3145

HOME PAGE: http://

University of Groningen ( email )

Postbus 72
9700 AB Groningen

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Tim Kooijmans

RMIT University ( email )

Level 12, 239 Bourke Street
Melbourne, Victoria

Chris Veld

Monash University ( email )

Building 11E
Clayton, Victoria 3800

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