【报告主题】Public Disclosure Regulatory Enforcement and Connected Investors in Corporate Bond Issuance
【主讲嘉宾】黄德尊，南加州大学教授
【报告时间】2023年5月30日 14:00
【报告地点】会计学院108室
【内容提要】
We analyze whether regulatory comment letters (CLs) negatively affect corporate bond issuance and connected investors’ participation in the issuance could mitigate the CLs’ negative impact. Using a hand-collected dataset of CLs issued by China’s bond market regulator prior to the bond ssuance, we find that issuers are less likely to issue bonds after receiving CLs, suggesting that regulators’ concerns about issuers’ public disclosures negatively affect the issuance. However, we find that connected investors receive a larger allotment for the bonds from CL-recipients than non-CL-recipients, suggesting that connected investors increase their participation to mitigate CLs’ negative effect on the bond issuance. Moreover, the connected investors are financial institutions that have a prior lending relationship with the issuers. Their increase in bond purchase from the CL-recipient is subsequently rewarded by the issuer with more banking business, indicating that they have a quid pro quo relationship. We also find hat connected investors’ increase in bond purchase from the CL-recipient does not lead to better ex-post bond performance, refuting the notion that connected investors’ purchase is motivated by superior private information.