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| Tekijä: | Hale, G. Santos, J.A.C. |
| Otsikko: | Do banks price their informational monopoly? |
| Lehti: | Journal of Financial Economics
2009 : AUG, VOL. 93:2, p. 185-206 |
| Asiasana: | USA banking information initial public offerings bonds companies credit rating |
| Vapaa asiasana: | loan spreads |
| Kieli: | eng |
| Tiivistelmä: | 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. |
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