Initial Public Debt Offerings

We analyze a sample of firms that choose to tap the public debt markets before the public   equity markets. These “debt first” firms, which have typically never been   analyzed in the prior literature, are more likely to be sponsor   backed, are significantly larger on average and less likely to have  information asymmetry problems than traditional “equity‐first”   firms in the same industry and year. Their debt issues are more expensive   and face more restrictive covenants than debt issues by publicly   listed firms that tap the debt market for the first time. However, when   the debt‐first firms eventually go public, they face lower underpricing   than firms without public debt that undertake an initial public   offering in the same industry. Our results document the importance of   ownership structure in additional to traditional capital structure   theories in the initial capital structure decisions of firms.

July 2016

March 2016

July 2015

April 2015

July 2014

April 2014