Debt Analyst Coverage of Private Firms

ABSTRACT This study examines how information spillovers from equity to debt markets (“equity spillovers”) affect sell-side analysts’ activities and the informativeness of their reports. To explore this relation, I compare analyst reports for firms without (private firms) with (public firms). find that, absent spillovers, analysts rely more on mandatory SEC filings fill gap private firms. additional effort, however, reduces coverage overall. Conditional coverage, content is remarkably similar across public Finally, that are informative than Collectively, my findings shed light externalities created by market intermediaries contribute price discovery process.