TY  - UNPD
A1  - Kaya, Orcun
A1  - Wang, Lulu
T1  - The role of bank lending tightening on corporate bond issuance in the eurozone
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 456
N2  - This paper empirically tests the role of bank lending tightening on non-financial corporate (NFC) bond issuance in the eurozone. By utilizing a unique data set provided by the ECB Bank Lending Survey, we capture the "pure" credit supply effect on corporate external financing. We find that tightened credit standards positively affect the NFC bond issuance: A 1pp increase in banks reporting considerable tightening on loans leads to around a 7% increase in firms' bond issuance in the eurozone. Focusing on a spectrum of aspects contributing to bank credit tightening, we document that banks' balance sheet constraints, as well as the perception of risk lead to significantly higher NFC bond issuance. In addition, we show that stricter lending conditions, such as wider margins, higher collateral requirements and covenants significantly increase NFC bond issuance volumes too. Furthermore, the impact of bank credit tightening on firms' bond issuance is particularly observable in core eurozone countries and not in peripheral countries. This is partially due to the underdeveloped of debt capital markets in the peripheral countries.
T3  - CFS working paper series - 456 
KW  - Debt Securities
KW  - Corporate Financing
KW  - Euro Area
KW  - Structural Change
Y1  - 2014
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/33833
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-338337
UR  - https://www.ifk-cfs.de/2415.html
N1  - First Draft July 2013; this version 28 April 2014
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -