Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212684 
Year of Publication: 
2010
Series/Report no.: 
BOFIT Discussion Papers No. 16/2010
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
This paper investigates stock market reaction to debt arrangements in Russia. The analysis of the valuation of debt arrangements by stock markets provides information about the use of debt by Russian companies. We apply the event study methodology to check whether debt announcements lead to abnormal returns using a sample of Russian listed companies that issued syndicated loans or bonds between June 2004 and December 2008. We find a negative reaction of stock markets to debt arrangements that can be explained by moral hazard behavior of shareholders at the expense of debtholders. Further, we observe no significant difference between announcements of syndicated loans and bonds. Thus, our findings support the view that Russian companies could have incentives to limit their reliance on external debt.
Subjects: 
corporate bonds
event study
Russia
stock returns
syndicated loans
JEL: 
G14
G20
P30
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-691-0
Document Type: 
Working Paper

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