This paper documents novel evidence that private debt contains value-relevant nonpublic information with significant economic value. We extract banks' private information from term loan spreads. Abnormal loan spreads significantly predict firms' future operating performance and uncertainty...

Prior studies have shown that newly public firms exhibit a high degree of uncertainty and asymmetric information, with few reliable sources of information. These findings suggest that investors could benefit if some independent party is able to assess the quality of a newly public firm. Since...