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Syndicated Loan Announcements and Borrower Value
Author(s) -
Gasbarro Dominic,
Le KimSong,
Schwebach Robert G.,
Zumwalt J. Kenton
Publication year - 2004
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.2004.00081.x
Subject(s) - web syndication , business , syndicated loan , monetary economics , loan , shareholder , financial system , share price , value (mathematics) , finance , economics , corporate governance , venture capital , machine learning , stock exchange , computer science
Announcements of syndication loans increase borrowers' shareholder wealth if they are revolving credit agreements but not if they are term loans. Share price responses to revolving credit announcements are positive and significant, whereas the wealth effect for term loans is negative and significant. The results show that announcements from both the financial press and commercial information providers can affect borrower share price reaction. Overall, single syndication announcements appear to be more newsworthy than multiple announcements reported in the financial press, and we find evidence of information leakage, post‐announcement drift, or both.