Date of Award


Document Type


Degree Name

Doctor of Philosophy (PhD)



First Advisor

Donald Deis


A number of theories have been developed that attempt to explain the role of bank loans and public debt in corporate financing. Research suggests that banks may have a comparative advantage in performing at least two valuable functions, information gathering and monitoring. The primary responsibility of analysts is also to gather and disseminate information on firms. However, it is not known how analysts following affects market response to bank loan announcements. The purpose of this study was to (1) determine whether financial analyst following affects market response to bank loan announcements; and (2) to determine whether firms receiving bank loans actively seek the attention of analysts less than firms not receiving bank loans. Results indicate that there is an analyst following effect that is not accounted for by firm size alone. In addition, the reputation of the analyst or brokerage is significant for portfolios of favorable loan announcements. Finally, the importance of both following and reputation measures seems to vary depending on the type of loan announcement (favorable or unfavorable) and firm size. Contrary to expectations, firms announcing bank loans have lower share prices and make more presentations to the NYSSA after controlling for size than other firms within the same industry. These results indicate that firms announcing bank loans are actively seeking the attention of analysts more than other firms. Finally, other variables which banking theory suggests may influence market response to bank loan announcements are found to be significant for particular loan type by firm size portfolios of firms. Significant variables include industry classification, the relative size of the loan, the number of banks participating in the loan, and the length of time firm data has been available on the CRSP tapes.