Presented at the 10 th Annual Australasian Finance & Banking Conference Sydney December , 1997 Are Bank Loans Special ? - Australian Evidence
نویسنده
چکیده
This paper examines the information content of loan announcements using an event study methodology. I differentiate between loan announcements according to the type of lending institution. The empirical results suggest that the information released by bank loans announcements are greater than loans announced by other lenders. Furthermore, the market response is greatest when the borrower firm has the greatest volume of uncertainty prior to the loan announcement. The results imply that banks release new information in the loan announcements and that the role of banks in resolving information asymmetry is most valuable in those companies which have the highest levels of uncertainty. Finally, there seems to be a strong connection between the value of the information released and the type of banking institution advancing the loan. Full service banks offer the best quality information to the market this implies a specialness in this bankborrower relationship which may emanate from the range of services offered by a full service bank.
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