Does the type of debt matter? Stock market perception in Europe

Zuzana Fungáčová, Christophe Godlewski and Laurent Weill

No 19/2015, Bank of Finland Research Discussion Papers from Bank of Finland

Abstract: We study the effect of bank loan and bond announcements on borrower's stock price. We apply an event study methodology on a sample of companies from 17 European countries and find that debt announcement generates a positive stock market reaction. However, our main conclusion is that the issuance of a loan exerts a significantly stronger reaction than does the issuance of a bond. This finding supports the hypothesis that loan issuance has a positive certification effect. The analysis of determinants of abnormal returns following debt announcements shows a positive impact of financial development and a negative effect of the Eurozone crisis.

JEL-codes: G14 G20 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/212327/1/bof-rdp2015-019.pdf (application/pdf)

Related works:
Journal Article: Does the type of debt matter? Stock market perception in Europe (2020)
Working Paper: Does the type of debt matter? Stock market perception in Europe (2019)
Working Paper: Does the Type of Debt Matter? Stock Market Perception in Europe (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:bofrdp:rdp2015_019

Access Statistics for this paper

More papers in Bank of Finland Research Discussion Papers from Bank of Finland Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().