Price discovery and dissemination of private information by loan syndicate participants

Journal of Accounting Research

Volumn 48, Issue 5, 2010, Pages 921-972

  Bushman, Robert M ^a   Smith, Abbie J ^b   Wittenberg Moerman, Regina ^b  

^a UNIVERSITY OF NORTH CAROLINA   (United States)

^b UNIVERSITY OF CHICAGO   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 78649434451     PISSN: 00218456     EISSN: 1475679X     Source Type: Journal    
DOI: 10.1111/j.1475-679X.2010.00384.x     Document Type: Article

References (94)

1. Acharya, V., and T. Johnson Insider Trading in Credit Derivatives. Journal of Financial Economics 84 (2007): 110-41.
2. Alford, A.; R. Leftwich ; and M. Zmijewski The Relative Informativeness of Accounting Disclosures in Different Countries. Journal of Accounting Research (Supplement) 31 (1993): 183-223.
3. Allen, L., and A. Gottesman The Informational Efficiency of the Equity Market as Compared to the Syndicated Bank Loan Market. Journal of Financial Services Research 30(1) (2006): 5-42.
4. Allen, L.; A. Gottesman ; and L. Peng The Impact of Joint Participation on Liquidity in Equity and Syndicated Bank Loan Markets, "Unpublished paper, Baruch College, (2009). Web site
5. Allen, L.; H. Guo ; and J. Weintrop "The Information Content of Quarterly Earnings in Syndicated Bank Loan Prices. Asia-Pacific Journal of Accounting and Economics 15 (2008): 91-122.
6. Altman, E.; A. Gande ; and A. Saunders Bank Debt versus Bond Debt: Evidence from Secondary Market Prices. Journal of Money, Credit and Banking 42 (2010): 755-67.
7. Anderson, J. Hedge Funds Draw Insider Scrutiny, "The New York Times, October 16, 2006.
8. Anilowski, C.; M. Feng ; and D. Skinner Does Earnings Guidance Affect Market returns? The Nature and Information Content of Aggregate Earnings Guidance. Journal of Accounting and Economics 44 (2007): 36-63.
9. Athanassakos, G., and M. Kalimipalli Analyst Forecast Dispersion and Future Stock Return Volatility. Quarterly Journal of Business and Economics 42 (2003): 57-78.
10. Ball, R. "Infrastructure Requirements for an Economically Efficient System of Public Financial Reporting and Disclosure. Brookings-Wharton Papers on Financial Services (2001): 69-127.
11. Ball, R., and P. Brown An Empirical Evaluation of Accounting Income Numbers. Journal of Accounting Research 6 (1968): 159-78.
12. Ball, R., and S. P. Kothari Security Returns Around Earnings Announcements. Accounting Review 66 (1991): 718-38.
13. Ball, R., and L. Shivakumar How Much New Information Is There in Earnings? Journal of Accounting Research 46 (2008): 975-1016.
14. Barth, M.; R. Kasznik ; and M. McNichols Analyst Coverage and Intangible Assets. Journal of Accounting Research 39 (2001): 1-34.
15. Beaver, W. Financial Reporting: An Accounting Revolution, Third Edition, Upper Saddle River, NJ Prentice Hall, 1998.
16. Beaver, W.; C. Shakespeare ; and M. Soliman Differential Properties in the Ratings of Certified Versus Non-certified Bond Rating Agencies. Journal of Accounting & Economics 42 (2006): 303-34.
17. Beekes, W., and P. Brown Do Better Governed Australian Firms Make More Informative Disclosures? Journal of Business, Finance & Accounting 33 (2006): 422-50.
18. Beekes, W., and P. Brown On the Timeliness of Price Discovery." Working paper, Lancaster University, (2007). Web site
19. Beekes, W.; P. Brown ; and G. Chin Do Better Governed Firms Make More Informative Disclosures? Canadian Evidence." Working paper, Lancaster University, (2006). Web site
20. Bharath, S.; S. Dahiya ; A. Saunders ; and A. Srinivasan So What Do I Get? The Bank's View of Lending Relationships. The Journal of Financial Economics 85 (2008): 368-419.
21. Bharath, S.; S. Dahiya ; A. Saunders ; and A. Srinivasan Lending Relationships and Loan Contract Terms. The Review of Financial Studies (2009): Forthcoming.
22. Black, F., and M. Scholes The Pricing of Options and Corporate Liabilities. Journal of Political Economy 81 (1973): 637-59.
23. Blanco, R.; S. Brennan ; and I. Marsh An Empirical Analysis of the Dynamic Relation Between Investment-Grade Bonds and Credit Default Swaps. The Journal of Finance 60 (2005): 2255-81.
24. Boot, A. Relationship Banking: What Do We Know? Journal of Financial Intermediation 9 (2000): 7-25.
25. Boot, A.; Greenbaum, S.; and A. Thakor Reputation and Discretion in Financial Contracting. American Economic Review 83 (1993): 1165-83.
26. Bradley, M., and M. Roberts The Structure and Pricing of Corporate Debt Covenants." Working paper, Duke University (2004). Web site
27. Braun, T., and T. Alonzo A Modified Sign Test for Comparing Paired ROC Curves. Biostatistics 9 (2008): 364-72.
28. Brennan, M., and A. Subrahmanyam Investment Analysis and Price Formation in Securities Markets. Journal of Financial Economics 38 (1995): 361-81.
29. Brown, P.; S. Taylor ; and T. Walter The Impact of Statutory Sanctions on the Level and Information Content of Voluntary Corporate Disclosure. Abacus 35 (1999): 138-62.
30. Bushee, B.; J. Core ; W. Guay ; and J. Hamm The Role of the Business Press as an Information Intermediary. Journal of Accounting Research 48 (2010): 1-19.
31. Butler, M.; A. Kraft ; and I. Weiss The Effect of Reporting Frequency on the Timeliness of Earnings: The Cases of Voluntary and Mandatory Interim Reports. Journal of Accounting and Economics 43 (2007): 181-217.
32. Chemmanur, T, and P. Fulghieri Reputation, Renegotiation and the Choice Between Bank Loans and Publicly Traded Debt. Review of Financial Studies 7 (1994): 475-506.
33. Core, J. A Review of the Empirical Disclosure Literature: Discussion. Journal of Accounting and Economics 31 (2001): 441-56.
34. De Franco, G.; F. Vasvari ; and R. Wittenberg-Moerman The Informational Role of Bond Analysts. Journal of Accounting Research 47 (2009): 1201-48.
35. Dennis, S., and D. Mullineaux Syndicated Loans. Journal of Financial Intermediation 9 (2000): 404-26.
36. Diamond, D. W. Financial Intermediation and Delegated Monitoring. The Review of Economic Studies 51 (1984): 393-414.
37. Diamond, D. Reputation Acquisition in Debt Markets. Journal of Political Economy 4 (1989): 828-62.
38. Diamond, D. Monitoring and Reputation: The Choice Between Bank Loans and Directly Placed Debt. Journal of Political Economy 99 (1991): 689-721.
39. Dichev, I., and D. Skinner Large-Sample Evidence on the Debt Covenant Hypothesis. Journal of Accounting and Economics 40 (2002): 1091-123.
40. Dyck, A., and L. Zingales The Corporate Governance Role of the Media." Working paper, University of Toronto (2002). Web site
41. Easton, P.; S. Monahan ; and F. Vasvari Initial Evidence on the Role of Earnings in the Bond Market. Journal of Accounting Research 47 (2009): 721-66.
42. Fama, E. What's Different About Banks? Journal of Monetary Economics 15(1) (1985): 29-39.
43. Fang, L., and J. Peress Media Coverage and the Cross-section of Stock Returns. Journal of Finance 64 (2009): 2023-52.
44. Francis, J.; K. Schipper ; and L. Vincent Earnings Announcements and Competing Information. Journal of Accounting and Economics 33 (2002): 313-42.
45. Frankel, R.; S. P. Kothari ; and J. Weber Determinants of the Informativeness of Analyst Research. Journal of Accounting and Economics 41 (2006): 29-54.
46. Gatev, E., and P. Strahan Liquidity Risk and Syndicate Structure. Journal of Financial Economics 93 (2009): 490-504.
47. Gopalan, R.; V. Nanda ; and V. Yerramilli Lead Arranger Reputation and the Loan Syndication Market." Working paper, Washington University, Saint Louis, (2009). Web site
48. Greenbaum, S., and A. Thakor Contemporary Financial Intermediation, New York Dryden Press, 1995.
49. Healy, P., and K. Palepu A Review of the Empirical Disclosure Literature. Journal of Accounting and Economics 31 (2001): 405-40.
50. Heflin, F.; K. R. Subramanyam ; and Y. Zhang Regulation FD and the Financial Information Environment: Early Evidence. The Accounting Review 78 (2003), 1-37.
51. Hemel, D. The Real Losers in Insider Trading, "Forbes, May 11, 2009.
52. Hite, G., and A. Warga The Effect of Bond-Rating Changes on Bond Price Performance. Financial Analysts Journal 53 (1997): 35-51.
53. Hong, H.; T. Lim ; and J. Stein Bad News Travels Slowly: Size, Analyst Coverage and the Profitability of Momentum Strategies. Journal of Finance 55 (2000): 265-95.
54. Hotchkiss, E., and T. Ronen The Informational Efficiency of the Corporate Bond Market: An Intraday Analysis. Review of Financial Studies 15 (2002): 1325-54.
55. Ivashina, V., and Z. Sun Institutional Stock Trading on Loan Market Information." Working paper, Harvard Business School, (2009). Web site
56. Jiang, W.; K. Li ; and P. Shao When Shareholders Are Creditors: Effects of the Simultaneous Holding of Equity and Debt by Institutional Investors." Working paper, Columbia Business School (2009). Web site
57. Jones, J.; W. Lang ; and P. Nigro Agent Bank Behavior in Bank Loan Syndications. The Journal of Financial Research 28 (2005): 385-402.
58. Kim, O., and R. Verrecchia Market Liquidity and Volume Around Earnings Announcements. Journal of Accounting and Economics 17 (1994): 41-67.
59. King, R.; G. Pownall ; and G. Waymire Expectations Adjustment via Timely Management Forecasts: Review, Synthesis, and Suggestions for Future Research. Journal of Accounting Literature 9 (1990): 113-44.
60. Kothari, S. P. Capital Markets Research in Accounting. Journal of Accounting and Economics 31 (2001): 105-231.
61. Lang, M., and R. Lundholm Cross-sectional Determinants of Analyst Ratings of Corporate Disclosures. Journal of Accounting Research 31 (1993): 246-71.
62. Lee, S., and D. Mullineaux Monitoring, Financial Distress, and the Structure of Commercial Lending Syndicates. Financial Management 33 (2004): 107-30.
63. Leuz, C., and P. Wysocki Capital-Market Effects of Corporate Disclosures and Disclosure Regulation, "Canada Steps Up. Research Study: Commissioned by the Task Force to Modernize Securities Legislation in Canada, 26 (2006): 183-237.
64. Lev, B. On the Usefulness of Earnings and Earnings Research: Lessons and Directions from Two Decades of Empirical Research. Journal of Accounting Research 27 (1989): 153-201.
65. Longstaff, F.; S. Mithal ; and E. Neis Corporate Yield Spreads: Default Risk or Liquidity? Journal of Finance 60 (2003): 2213-53.
66. LSTA. The Handbook of Loan Syndications and Trading, edited by A. Taylor and A. Sansone New York McGraw-Hill, 2007.
67. Lummer, S., and J. McConnell Further Evidence on Bank Lending Process and Capital Market Response to Bank Loan Agreements. Journal of Financial Economics 25 (1989): 52-63.
68. McNichols, M. The Anticipation of Earnings in Securities Markets." Dissertation, University of California, Los Angeles, 1984.
69. McNichols, M., and B. Trueman Public Disclosure, Private Information Collection and Short-Term trading. Journal of Accounting and Economics 17 (1994): 69-94.
70. Massa, M., and Z. Rehman Information Flows Within Financial Conglomerates: Evidence from the Banks-Mutual Fund Relationship. Journal of Financial Economics 89 (2008): 288-306.
71. Massoud, N.; D. Nandy ; A. Saunders ; and K. Song Do Hedge Funds Trade on Private Information? Evidence from Syndicated Lending and Short-Selling. Journal of Financial Economics (2009): Forthcoming.
72. Merton, R. On the Pricing of Corporate Debt: The Risk Structure of Interest Rates. Journal of Finance 29 (1974): 449-70.
73. Nandy, D., and P. Shao Institutional Investment in Syndicated Loans." Working paper, York University (2008). Web sites:
74. Nini, G. How Non-banks Increased the Supply of Bank Loans: Evidence from Institutional Term Loans." Working paper, University of Pennsylvania (2008). Web site:
75. Nini, G.; A. Sufi ; and D. Smith Creditor Control Rights, Corporate Governance, and Firm Value." Working paper, University of Pennsylvania (2009). Web site
76. Norden, L., and M. Weber The Co-movement of Credit Default Swap, Bond and Stock Markets: An Empirical Analysis. European Financial Management 13 (2007): 999-1001.
77. Pettifer, N. Insider Fine Shouldn't Worry UK Hedge Funds, "International Financial Law Review, September 12, 2008.
78. Piotroski, J., and D. Roulstone The Influence of Analysts, Institutional Investors, and Insiders on the Incorporation of Market, Industry and Firm-Specific Information into Stock Prices. Accounting Review 79 (2004): 1119-51.
79. Ramakrishnan, R., and A. Thakor Information Reliability and a Theory of Financial Intermediation. Review of Economic Studies 51(3) (1984): 415-32.
80. Ramnath, S.; S. Rock ; and F. Shane A Review of Research Related to Financial Analysts' Forecasts and Stock Recommendations." Working paper, University of Miami (2008). Web site
81. Roberts, M., and A. Sufi Control Rights and Capital Structure: An Empirical Investigation. Journal of Finance 93 (2009): 159-84.
82. Sargent, C. The New Insider Trading? Investment Dealers' Digest Magazine, June 20, 2005.
83. Skinner, D. Why Firms Voluntarily Disclose Bad News. Journal of Accounting Research 32 (1994): 38-60.
84. Smith, C., and R. Watts The Investment Opportunity Set and Corporate Financing, Dividend and Compensation Policies. Journal of Financial Economics 32 (1992): 263-92.
85. Soltes, E. News Dissemination and the Impact of the Business Press." Working paper, Harvard Business School, 2010.
86. Standard and Poor's. A Guide to the Loan Market, New York Standard & Poor's, 2007.
87. Sufi, A. Information Asymmetry and Financing Arrangements: Evidence from Syndicated Loans. The Journal of Finance 62 (2007): 629-68.
88. Vassalou, M., and Y. Xing Default Risk in Equity Returns. The Journal of Finance 59 (2004): 831-68.
89. Verrecchia, R. Essays on Disclosure. Journal of Accounting and Economics 32 (2001), 91-180.
90. Winton, A. Delegated Monitoring and Bank Structure in a Finite Economy. Journal of Financial Intermediation 4 (1995): 158-87.
91. Wittenberg-Moerman, R. The Role of Information Asymmetry and Financial Reporting Quality in Debt Trading: Evidence from the Secondary Loan Market. Journal of Accounting and Economics 46 (2008): 240-60.
92. Womack, K. Do Brokerage Analysts' Recommendations Have Investment Value? Journal of Finance 51 (1996): 137-67.
93. Yago, G., and D. McCarthy The U.S. Leveraged Loan Market: A Primer. Santa Monica, CA: Milken Institute, 2004.
94. Yohn, T. Information Asymmetry Around Earnings Announcements. Review of Quantitative Finance and Accounting 11 (1998): 165-82.