Financial Intermediation, lender equity and project finance debt mandates

Loading...
Thumbnail Image
File version

Version of Record (VoR)

Author(s)
Altansukh, Lkhagvajav
Fernando Distadio, Luiz
Ferguson, Andrew
Griffith University Author(s)
Primary Supervisor
Other Supervisors
Editor(s)
Date
2022
Size
File type(s)
Location

Paris, France

License
Abstract

We study market reactions to mining developers announcing project finance debt mandates. We document a significant mean (median) 3-day abnormal return of 4.3% (2.77%), consistent with information transfer from private lenders to equityholders. Thus, the daily market reactions are stronger for debt mandate announcements than for project finance approvals consistent with a greater reduction in information asymmetry and/or the ‘retention of the option to wait’. Cross-sectional tests indicate that debt mandates where lenders hold equity positions in the borrower experience higher abnormal returns, suggesting lender equity conveys important signals of information asymmetry reduction for borrowers in project finance.

Journal Title
Conference Title

8th Paris Financial Management Conference (PFMC-2022)

Book Title
Edition
Volume
Issue
Thesis Type
Degree Program
School
DOI
Patent number
Funder(s)
Grant identifier(s)
Rights Statement
Rights Statement

© 2022 Paris Financial Management Conference. The attached file is reproduced here in accordance with the copyright policy of the publisher. Please refer to the conference's website for access to the definitive, published version.

Item Access Status
Note
Access the data
Related item(s)
Subject

Accounting, auditing and accountability

Banking, finance and investment

Persistent link to this record
Citation

Distadio, L; Ferguson, A; Altansukh, L, Financial Intermediation, lender equity and project finance debt mandates, 8th Paris Financial Management Conference (PFMC-2022), 2022