Borrowers realize statistically significant, positive abnormal returns around the announcement date of line-of-credit agreements with banks, and several explanations have been proposed. Little evidence exists, however, on the influence of these agreements on the counterparty, the lending...

Trust-preferred stock is a debt-equity hybrid that offers the tax deductibility of dividends but is treated as equity capital by bank regulators and rating agencies. The purpose of this paper is to examine whether holders of bank debt securities benefit from trust-preferred issuance in the form...