The wealth effects of repurchases on bondholders

• 成果类型: Article
• 署名作者: Maxwell, WF; Stephens, CP
• 署名单位: University of Arizona; Louisiana State University System; Louisiana State University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/1540-6261.00550
• 发表日期: 2003
• 页码: 895-919
• 关键词: SELF-TENDER OFFERS; SHARE REPURCHASES; DIVIDEND CHANGES; STOCK

摘要

Prior research has documented positive abnormal stock returns around the announcements of repurchase programs; several explanations of these returns have been suggested, including signaling, free cash flow, and wealth redistributions. This study analyzes abnormal stock, bond, and firm returns,around repurchase announcements to examine these hypotheses. We find evidence consistent with both signaling and wealth redistribution. The loss to bondholders is a function of the size of the repurchase, and the risk of the firm's debt. We also find that bond ratings are twice as likely to be downgraded as upgraded after the announcement of the repurchase program.