search query: @author Hale, G. / total: 2
reference: 1 / 2
« previous | next »
Author: | Hale, G. Santos, J.A.C. |
Title: | Do banks price their informational monopoly? |
Journal: | Journal of Financial Economics
2009 : AUG, VOL. 93:2, p. 185-206 |
Index terms: | USA banking information initial public offerings bonds companies credit rating |
Freeterms: | loan spreads |
Language: | eng |
Abstract: | It is suggested by theory that banks' private information lets them hold up borrowers for higher interest rates (hereafter as: i-rt/s). Due to the fact that new company information is revealed at the time of its bond initial public offerings (IPOs), banks will be forced to adjust their loan i-rt/s. downwards. This study tests this hypothesis. It is found that firms can borrow at lower i-rts. after their bond IPO. In particular, firms that get their first credit rating at the time of their bond IPO benefit from larger i-rts. savings than those that already had a credit rating. These findings provide support for the hypothesis of banks pricing their informational monopoly. |
« previous | next »
SCIMA