Loan price in mergers and acquisitionsCitation formats

Standard

Loan price in mergers and acquisitions. / Gao, Ning; Hua, Chen; Khurshed, Arif.

In: Journal of Corporate Finance, Vol. 67, 101754, 04.2021.

Research output: Contribution to journalArticlepeer-review

Harvard

APA

Vancouver

Author

Gao, Ning ; Hua, Chen ; Khurshed, Arif. / Loan price in mergers and acquisitions. In: Journal of Corporate Finance. 2021 ; Vol. 67.

Bibtex

@article{22eeba42b9a3441d91d0f6cd8e75d832,
title = "Loan price in mergers and acquisitions",
abstract = "We investigate loan price in mergers and acquisitions (M&As), using hand-matched loan information for a sample of 512 U.S. M&A transactions. We find the relative size of a deal constitutes a prominent determinant of the loan price measured by the all-in spread drawn (AISD). This result is robust to several specifications that address endogeneity concerns. Cross-sectional analyses show that aggravated credit risk and information uncertainty after M&A go some way towards explaining lenders' concerns over large relative deal size. Further analysis demonstrates higher AISD is associated with lower post-transaction performance, indicating loan price factors in the risk of poor post-transaction performance correctly.",
keywords = "Loan price, Mergers and acquisitions (M&As), Post-acquisition performance, Relative deal size",
author = "Ning Gao and Chen Hua and Arif Khurshed",
note = "Publisher Copyright: {\textcopyright} 2020 Copyright: Copyright 2021 Elsevier B.V., All rights reserved.",
year = "2021",
month = apr,
doi = "10.1016/j.jcorpfin.2020.101754",
language = "English",
volume = "67",
journal = "Journal of Corporate Finance",
issn = "0929-1199",
publisher = "Elsevier BV",

}

RIS

TY - JOUR

T1 - Loan price in mergers and acquisitions

AU - Gao, Ning

AU - Hua, Chen

AU - Khurshed, Arif

N1 - Publisher Copyright: © 2020 Copyright: Copyright 2021 Elsevier B.V., All rights reserved.

PY - 2021/4

Y1 - 2021/4

N2 - We investigate loan price in mergers and acquisitions (M&As), using hand-matched loan information for a sample of 512 U.S. M&A transactions. We find the relative size of a deal constitutes a prominent determinant of the loan price measured by the all-in spread drawn (AISD). This result is robust to several specifications that address endogeneity concerns. Cross-sectional analyses show that aggravated credit risk and information uncertainty after M&A go some way towards explaining lenders' concerns over large relative deal size. Further analysis demonstrates higher AISD is associated with lower post-transaction performance, indicating loan price factors in the risk of poor post-transaction performance correctly.

AB - We investigate loan price in mergers and acquisitions (M&As), using hand-matched loan information for a sample of 512 U.S. M&A transactions. We find the relative size of a deal constitutes a prominent determinant of the loan price measured by the all-in spread drawn (AISD). This result is robust to several specifications that address endogeneity concerns. Cross-sectional analyses show that aggravated credit risk and information uncertainty after M&A go some way towards explaining lenders' concerns over large relative deal size. Further analysis demonstrates higher AISD is associated with lower post-transaction performance, indicating loan price factors in the risk of poor post-transaction performance correctly.

KW - Loan price

KW - Mergers and acquisitions (M&As)

KW - Post-acquisition performance

KW - Relative deal size

U2 - 10.1016/j.jcorpfin.2020.101754

DO - 10.1016/j.jcorpfin.2020.101754

M3 - Article

VL - 67

JO - Journal of Corporate Finance

JF - Journal of Corporate Finance

SN - 0929-1199

M1 - 101754

ER -