Refinancing and shareholder value: covered bond issuances between 2007 and 2010

Jérémy Morvan (), Christian Cadiou, Nathalie Cotillard and Jean Moussavou
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Jérémy Morvan: ICI - Laboratoire Information, Coordination, Incitations - UEB - Université européenne de Bretagne - European University of Brittany - UBO - Université de Brest - Télécom Bretagne - IMT - Institut Mines-Télécom [Paris] - IBSHS - Institut Brestois des Sciences de l'Homme et de la Société - UBO - Université de Brest
Christian Cadiou: ICI - Laboratoire Information, Coordination, Incitations - UEB - Université européenne de Bretagne - European University of Brittany - UBO - Université de Brest - Télécom Bretagne - IMT - Institut Mines-Télécom [Paris] - IBSHS - Institut Brestois des Sciences de l'Homme et de la Société - UBO - Université de Brest
Nathalie Cotillard: ICI - Laboratoire Information, Coordination, Incitations - UEB - Université européenne de Bretagne - European University of Brittany - UBO - Université de Brest - Télécom Bretagne - IMT - Institut Mines-Télécom [Paris] - IBSHS - Institut Brestois des Sciences de l'Homme et de la Société - UBO - Université de Brest
Jean Moussavou: ICI - Laboratoire Information, Coordination, Incitations - UEB - Université européenne de Bretagne - European University of Brittany - UBO - Université de Brest - Télécom Bretagne - IMT - Institut Mines-Télécom [Paris] - IBSHS - Institut Brestois des Sciences de l'Homme et de la Société - UBO - Université de Brest

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Abstract: This paper deals with an event study assessing the influence of covered bond issuance on European banks' share prices. Covered bonds are debt securities backed by mortgages. In contrast to CDOs, mortgages remain on the issuer's consolidated balance sheet. We show that covered bond issuances have a positive influence on issuers' share prices with a three days' delay. So, the stock market reacts not to the issuance announcement but to the success of the issuance.

Keywords: covered bonds; issuance; event study; subprime mortgage crisis (search for similar items in EconPapers)
Date: 2012
Note: View the original document on HAL open archive server: https://hal.science/hal-01540949
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Published in Bankers Markets & Investors : an academic & professional review, 2012, 120, pp.4-11

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01540949

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