Sell-Side Debt Analysts

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

See all articles by Rick Johnston

Rick Johnston

Rice University - Jesse H. Jones Graduate School of Business

Stanimir Markov

University of Texas at Dallas - Naveen Jindal School of Management

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 M. 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)

Rice University - Jesse H. Jones Graduate School of Business ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States

Stanimir Markov

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States
972 883 5166 (Phone)

Sundaresh Ramnath

University of Miami - Department of Accounting ( email )

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

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