Bank monitoring and the pricing of corporate public debt

• 成果类型: Article
• 署名作者: Datta, S; Iskandar-Datta, M; Patel, A
• 署名单位: Bentley University; Suffolk University; Wake Forest University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(98)00060-9
• 发表日期: 1999
• 页码: 435-449
• 关键词: bank cross-monitoring; public debt pricing; debt reputation; Yield spreads; Bond IPOs

摘要

lWe examine whether the existence of a bank/firm relationship lowers the cost of public debt financing, Using a sample of first public straight debt offers, we test the cross-monitoring effect of bank debt and Diamond's (1991, Journal of Political Economy, 99, 689-721) reputation-building argument. We find that the existence of bank debt lowers the at-issue yield spreads for first public straight bond offers by about 68 basis points, on average. Consistent with Diamond's reputation-building argument, we document that firm reputation is negatively related to the at-issue yield spread for initial public debt offers. (C) 1999 Elsevier Science S.A. All rights reserved.