Global equity offerings and access to domestic loan market: U.S. evidence

This study examines whether and to what extend global equity offerings at the IPO stage may affect issuing firms' ability to borrow in the domestic debt market. Tracking bank loans taken by U.S. IPO firms in the domestic syndicated loan market, we observe that global equity offering firms experience more favorable loan price than that offered to their domestic counterparts. This finding holds for a set of robustness tests of endogeneity issues. We also find that, compared with their domestic counterparts, global equity offering firms are less likely to have financial distress, engage more in international diversification, and are more likely to wait a longer time to apply for syndicated loans. •Test the relation between U.S. global equity offering firms and their loan costs in domestic debt market.•Identify a negative relation between global equity offerings and cost of bank loans.•Use a switching regression, a PSM method and a three-stage-least-square estimator to address the endogeneity issue.•Explore underlying mechanisms.•Adopt a probit model to test the decision on the timing of access to domestic loan market by issuing firms.