Firms' Response to Credit Supply: Evidence from Upsized Corporate Bond Offerings

• 成果类型: Article
• 署名作者: Hotchkiss, Edith; Sun, Hurong; Wang, Liying; Zhao, Yijia (Eddie)
• 署名单位: Boston College; Xichang University; University of Nebraska System; University of Nebraska Lincoln; University of Massachusetts System; University of Massachusetts Boston
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.00153
• 发表日期: 2026
• 关键词: Corporate bonds; primary market; order book size; Credit supply; Capital raising; upsizing; high yield bonds; credit market

摘要

Firms often respond to information about investor demand, learned when underwriters build the book to place corporate bonds, by upsizing the offering amount. We examine the factors that predict two measures of realized credit supply (oversubscription and yield tightening) and show that the unexpected component of credit supply can explain firms' upsizing decisions. Because firms' fundamentals and need for capital are unchanged in the few hours of bookbuilding, upsizing provides a bond-level measure that can be used to study the impact of credit supply on postissuance leverage and investment. Firms use the sizeable additional proceeds to reduce bank debt and increase cash holdings; net increases in leverage are temporary for riskier issuers. Our evidence does not support concerns of overinvestment in periods of accommodative credit markets.