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The Value of Shelf Registration for New Debt Issues

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  • Kadapakkam, Palani-Rajan
  • Kon, Stanley J

Abstract

The Securities and Exchange Commission (SEC) Rule 415 (shelf registration) allows eligible firms to register securities that they intend to issue in the next two years. Once the registration is declared effective, firms can enter the market instantaneously. Ineligible issuers, however, are required to notify the SEC at least forty-eight hours before entry. Supporters of the shelf rule contend that the rule provides valuable flexibility in timing issues. The authors examine this contention by comparing the market-timing performance of shelf and nonshelf debt issues. The results indicate that the shelf rule does provide valuable market-timing flexibility. Copyright 1989 by the University of Chicago.

Suggested Citation

  • Kadapakkam, Palani-Rajan & Kon, Stanley J, 1989. "The Value of Shelf Registration for New Debt Issues," The Journal of Business, University of Chicago Press, vol. 62(2), pages 271-292, April.
    • Handle: RePEc:ucp:jnlbus:v:62:y:1989:i:2:p:271-92
    DOI: 10.1086/296462
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    Cited by:

    1. Jaskowski, Marcin & Rettl, Daniel A., 2023. "Information acquisition costs and credit spreads," Journal of Banking & Finance, Elsevier, vol. 149(C).
    2. Autore, Don M. & Kumar, Raman & Shome, Dilip K., 2008. "The revival of shelf-registered corporate equity offerings," Journal of Corporate Finance, Elsevier, vol. 14(1), pages 32-50, February.
    3. Roten, Ivan C. & Mullineaux, Donald J., 2002. "Debt underwriting by commercial bank-affiliated firms and investment banks: More evidence," Journal of Banking & Finance, Elsevier, vol. 26(4), pages 689-718, April.
    4. Nayar, Nandkumar (Nandu) & Stock, Duane, 2008. "Make-whole call provisions: A case of "much ado about nothing?"," Journal of Corporate Finance, Elsevier, vol. 14(4), pages 387-404, September.
    5. Koerniadi, Hardjo & Krishnamurti, Chandrasekhar & Lau, Sie Ting & Tourani-Rad, Alireza & Yang, Ting, 2015. "The role of internal and external certification mechanisms in seasoned equity offerings," Journal of Multinational Financial Management, Elsevier, vol. 30(C), pages 110-127.
    6. Santos, Joao A.C., 2006. "Why firm access to the bond market differs over the business cycle: A theory and some evidence," Journal of Banking & Finance, Elsevier, vol. 30(10), pages 2715-2736, October.

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