Bank lines of credit as a source of long-term finance

• Main Authors: Chang, Xin, Chen, Yunling, Masulis, Ronald W.
• Other Authors: Nanyang Business School
• Format: Article
• Language: English
• Published: 2023
• Subjects: Business::Finance; Loans; Credit Rationing
• Online Access: https://hdl.handle.net/10356/169370
• Institution: Nanyang Technological University

Hand-collecting credit line drawdowns that firms classify as long-Term debt, we first document how long-Term drawdowns rise with high investment needs or weak external capital market conditions. Nearly all drawdown proceeds finance long-Term investment, including M&A activity. Unrated and lower-...