Corporate commercial paper, note issuance facilities, and shareholder wealth
In this paper, we hypothesize that the financial market regards the issuance of securities through a note issuance facility or a commercial paper program backed by a standby letter of credit as a favorable signal about the issuing firm. This is due to the certification role played by banks. We demon...
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| Veröffentlicht in: | Journal of international money and finance 1988-09, Vol.7 (3), p.289-302 |
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| container_title | Journal of international money and finance |
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| creator | Slovin, Myron B. Sushka, Marie E. Hudson, Carl D. |
| description | In this paper, we hypothesize that the financial market regards the issuance of securities through a note issuance facility or a commercial paper program backed by a standby letter of credit as a favorable signal about the issuing firm. This is due to the certification role played by banks. We demonstrate that announcements of commercial paper programs backed by these formal backstop facilities have a statistically significant positive effect on shareholder wealth. This result is in contrast to issues of other types of securities studied in the literature which have been shown to induce nonpositive effects on shareholder wealth. The initiation of commercial paper programs without this backing has little effect on shareholder wealth. Finally, we demonstrate that the quality of the credit ratings associated with these issues of commercial paper has little effect on abnormal returns. Thus, our results cannot be explained by the pattern of these ratings. |
| doi_str_mv | 10.1016/0261-5606(88)90032-0 |
| format | Article |
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Thus, our results cannot be explained by the pattern of these ratings.</description><subject>Commercial paper</subject><subject>Impacts</subject><subject>Regression analysis</subject><subject>Securities</subject><subject>Securities markets</subject><subject>Shareholders equity</subject><subject>Stock offerings</subject><subject>Stockholders</subject><subject>Studies</subject><issn>0261-5606</issn><issn>1873-0639</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>1988</creationdate><recordtype>article</recordtype><sourceid>X2L</sourceid><sourceid>K30</sourceid><recordid>eNp9kMFr2zAYxUVZoVm7_6AHs11WiNtPliVLl8EIXRcI9NKdhSx_Igq25UlORv_7Kc3IbT08PhDvPT1-hNxSuKdAxQNUgpZcgPgq5Z0CYFUJF2RBZcNKEEx9IIuz5Yp8TGkHAEIwuSCbVYhTiGbGwoZhwGi96YvJTBiXxRjys09pb0aLhTPW9372mJaFGbsibU3Ebeg7jMUfNP28vSGXzvQJP_271-TXj8eX1c9y8_y0Xn3flLaWzVy2rWprdLVztQKs2rphjeQg2obWUCloOYKUrGUVo5Rz1xrDnOIqr-edo8CuyedT7xTD7z2mWe_CPo75S11RLmvOocmmL_8zUQbAuRBAs6s-uWwMKUV0eop-MPFVU9BHuPpITh_JaSn1G1x9XLA-xSJOaM8ZRNz5wflRHzQzTdZrFlU5yYzPYllTViWVZlDp7Tzkrm-nLszIDh6jTtZjJt75iHbWXfDvj_kLXqiXiA</recordid><startdate>19880901</startdate><enddate>19880901</enddate><creator>Slovin, Myron B.</creator><creator>Sushka, Marie E.</creator><creator>Hudson, Carl D.</creator><general>Elsevier Ltd</general><general>Elsevier</general><general>Butterworth Scientific Ltd</general><general>Elsevier Science Ltd</general><scope>DKI</scope><scope>X2L</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>HFXKP</scope><scope>IOIBA</scope><scope>K30</scope><scope>PAAUG</scope><scope>PAWHS</scope><scope>PAWZZ</scope><scope>PAXOH</scope><scope>PBHAV</scope><scope>PBQSW</scope><scope>PBYQZ</scope><scope>PCIWU</scope><scope>PCMID</scope><scope>PCZJX</scope><scope>PDGRG</scope><scope>PDWWI</scope><scope>PETMR</scope><scope>PFVGT</scope><scope>PGXDX</scope><scope>PIHIL</scope><scope>PISVA</scope><scope>PJCTQ</scope><scope>PJTMS</scope><scope>PLCHJ</scope><scope>PMHAD</scope><scope>PNQDJ</scope><scope>POUND</scope><scope>PPLAD</scope><scope>PQAPC</scope><scope>PQCAN</scope><scope>PQCMW</scope><scope>PQEME</scope><scope>PQHKH</scope><scope>PQMID</scope><scope>PQNCT</scope><scope>PQNET</scope><scope>PQSCT</scope><scope>PQSET</scope><scope>PSVJG</scope><scope>PVMQY</scope><scope>PZGFC</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>19880901</creationdate><title>Corporate commercial paper, note issuance facilities, and shareholder wealth</title><author>Slovin, Myron B. ; Sushka, Marie E. ; Hudson, Carl D.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c487t-bb9b4ef4ff490e2b47378506b7140290b5e0883b3231155fbaa3f9596065df103</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>1988</creationdate><topic>Commercial paper</topic><topic>Impacts</topic><topic>Regression analysis</topic><topic>Securities</topic><topic>Securities markets</topic><topic>Shareholders equity</topic><topic>Stock offerings</topic><topic>Stockholders</topic><topic>Studies</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Slovin, Myron B.</creatorcontrib><creatorcontrib>Sushka, Marie E.</creatorcontrib><creatorcontrib>Hudson, Carl D.</creatorcontrib><collection>RePEc IDEAS</collection><collection>RePEc</collection><collection>CrossRef</collection><collection>Periodicals Index Online Segment 17</collection><collection>Periodicals Index Online Segment 29</collection><collection>Periodicals Index Online</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - West</collection><collection>Primary Sources Access (Plan D) - International</collection><collection>Primary Sources Access & Build (Plan A) - MEA</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Midwest</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Northeast</collection><collection>Primary Sources Access (Plan D) - Southeast</collection><collection>Primary Sources Access (Plan D) - North Central</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Southeast</collection><collection>Primary Sources Access (Plan D) - South Central</collection><collection>Primary Sources Access & Build (Plan A) - UK / I</collection><collection>Primary Sources Access (Plan D) - Canada</collection><collection>Primary Sources Access (Plan D) - EMEALA</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - North Central</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - South Central</collection><collection>Primary Sources Access & Build (Plan A) - International</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - International</collection><collection>Primary Sources Access (Plan D) - West</collection><collection>Periodicals Index Online Segments 1-50</collection><collection>Primary Sources Access (Plan D) - APAC</collection><collection>Primary Sources Access (Plan D) - Midwest</collection><collection>Primary Sources Access (Plan D) - MEA</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Canada</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - UK / I</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - EMEALA</collection><collection>Primary Sources Access & Build (Plan A) - APAC</collection><collection>Primary Sources Access & Build (Plan A) - Canada</collection><collection>Primary Sources Access & Build (Plan A) - West</collection><collection>Primary Sources Access & Build (Plan A) - EMEALA</collection><collection>Primary Sources Access (Plan D) - Northeast</collection><collection>Primary Sources Access & Build (Plan A) - Midwest</collection><collection>Primary Sources Access & Build (Plan A) - North Central</collection><collection>Primary Sources Access & Build (Plan A) - Northeast</collection><collection>Primary Sources Access & Build (Plan A) - South Central</collection><collection>Primary Sources Access & Build (Plan A) - Southeast</collection><collection>Primary Sources Access (Plan D) - UK / I</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - APAC</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - MEA</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Journal of international money and finance</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Slovin, Myron B.</au><au>Sushka, Marie E.</au><au>Hudson, Carl D.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Corporate commercial paper, note issuance facilities, and shareholder wealth</atitle><jtitle>Journal of international money and finance</jtitle><date>1988-09-01</date><risdate>1988</risdate><volume>7</volume><issue>3</issue><spage>289</spage><epage>302</epage><pages>289-302</pages><issn>0261-5606</issn><eissn>1873-0639</eissn><abstract>In this paper, we hypothesize that the financial market regards the issuance of securities through a note issuance facility or a commercial paper program backed by a standby letter of credit as a favorable signal about the issuing firm. This is due to the certification role played by banks. We demonstrate that announcements of commercial paper programs backed by these formal backstop facilities have a statistically significant positive effect on shareholder wealth. This result is in contrast to issues of other types of securities studied in the literature which have been shown to induce nonpositive effects on shareholder wealth. The initiation of commercial paper programs without this backing has little effect on shareholder wealth. Finally, we demonstrate that the quality of the credit ratings associated with these issues of commercial paper has little effect on abnormal returns. Thus, our results cannot be explained by the pattern of these ratings.</abstract><cop>Guildford</cop><pub>Elsevier Ltd</pub><doi>10.1016/0261-5606(88)90032-0</doi><tpages>14</tpages></addata></record> |
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| ispartof | Journal of international money and finance, 1988-09, Vol.7 (3), p.289-302 |
| issn | 0261-5606 1873-0639 |
| language | eng |
| recordid | cdi_proquest_journals_215845507 |
| source | RePEc; Elsevier ScienceDirect Journals; Periodicals Index Online |
| subjects | Commercial paper Impacts Regression analysis Securities Securities markets Shareholders equity Stock offerings Stockholders Studies |
| title | Corporate commercial paper, note issuance facilities, and shareholder wealth |
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