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Sell-Side Debt Analysts

50 Pages Posted: 25 Mar 2007 Last revised: 6 Mar 2015

Rick Johnston

University of Alabama at Birmingham - Department of Accounting and Information Systems

Stanimir Markov

Southern Methodist University (SMU) - Edwin L. Cox School of Business

Sundaresh Ramnath

University of Miami - Department of Accounting

Date Written: February 15, 2008

Abstract

We study the determinants and market impact of sell-side debt research. Analyzing a sample of 5,920 debt reports published by fifteen brokerage firms from 1999 to 2004, we document that companies with a higher probability of financial distress, lower market-to-book ratio, larger debt, and higher leverage receive more debt research. In addition, we document higher frequency of debt reports around credit ratings downgrades and find that their publication impacts equity prices. The evidence enhances our understanding of the nature of the market forces shaping sell-side debt research and its effect on price formation.

Keywords: Debt, Information Intermediaries, Distress, Analyst

JEL Classification: G14, G24, G29,

Suggested Citation

Johnston, Rick and Markov, Stanimir and Ramnath, Sundaresh, Sell-Side Debt Analysts (February 15, 2008). Available at SSRN: https://ssrn.com/abstract=973423 or http://dx.doi.org/10.2139/ssrn.973423

Rick M. Johnston (Contact Author)

University of Alabama at Birmingham - Department of Accounting and Information Systems ( email )

Birmingham, AL 35294
United States

Stanimir Markov

Southern Methodist University (SMU) - Edwin L. Cox School of Business ( email )

P.O. Box 750333
Dallas, TX 75275-0333
United States

Sundaresh Ramnath

University of Miami - Department of Accounting ( email )

Coral Gables, FL 33146-6531
United States
305-284-6668 (Phone)

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