Bank Debt Reduction Announcements and Negative Signaling
研究股票发行中减少银行债务的公告效应，发现其负面市场反应比减少非银行债务的公告更强烈，支持银行债务信号模型。
We examine 242 NYSE/AMEX and OTC common stock offerings that reduce bank debt and 254 that retire nonbank debt. We discover that bank debt reductions are associated with negative announcement period stock returns that are more than twice the magnitude of the negative returns found for nonbank debt reductions. The significant difference in returns indicate bank debt reductions transmits negative information beyond that previously cited in the stock offering literature. Regression tests show that the explanatory variable representing bank debt signaling models best explains stock returns. █ Bankers are parties to information about a firm's financial condition through their special relationship as lenders. This premise is the basis for the predictions of bank debt signaling models, which posit that bank debt issuance announcements convey positive news about a firm. Empirical research on debt offering announcements that raise cash for multi-corporate purposes supports this claim. The research documents statistically significant positive stock price reactions to bank debt announcements and negative reactions to nonbank debt announcements. If bank debt issuance announcements signal more favorable news than nonbank debt announcements, it follows that bank debt reduction announcements should signal more negative news than nonbank debt reduction announcements. Market participants will view bank debt reduction announcements as the result of decisions made by bankers acting upon unfavorable inside information. Our study extends prior research on equity offerings that reduce debt. We analyze 242 stock offering announcements that reduce bank debt, and 254 announcements that retire nonbank debt. Consistent with the predictions of bank debt signaling models, returns for bank debt reductions are more negative than returns for nonbank debt reductions, and the differences in returns are statistically significant.