Using a large sample of convertible and straight debt issues in the public, 144A, and bank loan markets from 1991 to 2004, we find that the 144A market has risen largely at the expense of the nonshelf public market, the overwhelming majority of the 144A issues are subsequently registered, and straight debt issuers with the highest credit quality and transparency tend to use the shelf public market. Our findings suggest that firms’ preference for speed of issuance drives the growth of the 144A market, and banks and qualified institutional buyers have advantages over public lenders in handling credit risk and information asymmetry.
Digital Object Identifier (DOI)
This is the peer reviewed version of the following articleHuang, Rongbing, and Gabriel G. Ramirez. "Speed of Issuance, Lender Specialization, and the Rise of the 144A Debt Market." Financial Management 39.2 (2010): 643-673. http://dx.doi.org/10.1111/j.1755-053X.2010.01087.x, which has been published in final form at http://dx.doi.org/10.1111/j.1755-053X.2010.01087.x . This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving