IDEAS home Printed from https://ideas.repec.org/a/bla/jfnres/v14y1991i1p1-13.html
   My bibliography  Save this article

Raising Capital With Private Placements Of Debt

Author

Listed:
  • Samuel H. Szewczyk
  • Raj Varma

Abstract

In this study the role of private placements of debt in the capital acquisition decision of public utilities is investigated. Whereas public offerings are sales of securities through financial intermediaries to the public‐at‐large, private placements are direct sales of securities by an issuing corporation to a limited number of institutional investors. In contrast to the negative stock price reactions typically found for public security sales, private placements are associated with significant positive abnormal returns in the shares of the issuing public utilities. Also, larger private placements appear to elicit a more favorable market response. Results are consistent with reduced information asymmetries and increased monitoring of the issuing firm resulting from the private placement.

Suggested Citation

  • Samuel H. Szewczyk & Raj Varma, 1991. "Raising Capital With Private Placements Of Debt," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 14(1), pages 1-13, March.
    • Handle: RePEc:bla:jfnres:v:14:y:1991:i:1:p:1-13
    DOI: 10.1111/j.1475-6803.1991.tb00640.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1475-6803.1991.tb00640.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1475-6803.1991.tb00640.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dennis, Steven A. & Lu, Weili, 2008. "New considerations in the announcement effects of privately placed debt," International Review of Financial Analysis, Elsevier, vol. 17(3), pages 507-522, June.
    2. Sung-Eun Yu, 2017. "The Role of Nonbank Financial Institutions in the Monetary Transmission Mechanism: Theory and Evidence," Working Paper Series, Department of Economics, University of Utah 2017_04, University of Utah, Department of Economics.
    3. Nikolas Rokkanen, 2009. "Lemmings in the bond market? An empirical analysis of the term structure of credit spreads," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 23(1), pages 31-57, March.
    4. Marciukaityte, Dalia & Varma, Raj, 2007. "Institutional investors as suppliers of equity-linked capital: Evidence from privately placed convertible debt," Journal of Business Research, Elsevier, vol. 60(4), pages 357-364, April.
    5. Uday Chandra & Nandkumar (Nandu) Nayar, 2008. "The Information Content of Private Debt Placements," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 35(9‐10), pages 1164-1195, November.
    6. Mark S. Carey & Stephen D. Prowse & John Rea & Gregory F. Udell, 1993. "The economics of the private placement market," Staff Studies 166, Board of Governors of the Federal Reserve System (U.S.).
    7. Uday Chandra & Nandkumar (Nandu) Nayar, 2008. "The Information Content of Private Debt Placements," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 35(9-10), pages 1164-1195.
    8. Yuping Ning & Rohaya Binti Abdul Jalil, 2023. "Private Placement of China-Listed Real Estate Firms: A Conceptual Idea," JRFM, MDPI, vol. 16(12), pages 1-23, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jfnres:v:14:y:1991:i:1:p:1-13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/sfaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.