publication . Article . Other literature type . 2017

Corporate financing and anticipated credit rating changes

Hung, Chi-Hsiou D.; Banerjee, Anurag; Meng, Qingrui;
Open Access English
  • Published: 01 May 2017
  • Publisher: Springer
  • Country: United Kingdom
Abstract
Firm circumstances change but rating agencies may not make timely revisions to their\ud ratings, increasing information asymmetry between firms and the market. We examine\ud whether firms time the securities market before a credit rating agency publicly reveals\ud its decision to downgrade a firm's credit rating. Using quarterly data, we show that\ud firms adjust their financing structures before credit rating downgrades are publicly\ud revealed. More specifically, firms on average increase their debt financing by 1.29%\ud before the disclosure of a rating downgrade, and we find that this increase is due to the\ud issuance of debt rather than the repurchase of e...
Subjects
free text keywords: Accounting, General Business, Management and Accounting, Finance, Credit rating, Credit crunch, business.industry, business, Financial system, Bond credit rating, Capital structure, Economics, Credit enhancement, Credit history, Debt, media_common.quotation_subject, media_common, Credit reference
Related Organizations
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publication . Article . Other literature type . 2017

Corporate financing and anticipated credit rating changes

Hung, Chi-Hsiou D.; Banerjee, Anurag; Meng, Qingrui;