A note on market response to corporate loan announcements in Canada

This note validates the key results of prior studies of bank loan announcem ent effects using a common data set drawn from the Canadian capital market. Announcements of bank loans are associated with positive abnormal returns significantly higher than for private placements and loan syndications. Ann ouncement effects are most pronounced when monitoring is most intense and w hen an announcement signals that the bank's private information is favorabl e. Conclusions of prior studies on bank loan announcements, conducted exclu sively on US data, are robust for a different banking system. (C) 2000 Else vier Science B.V. All rights reserved.