RT Journal Article
SR Electronic
T1 Sovereign Wealth Funds’ Investments and Corporate Bondholders
JF The Journal of Private Equity
FD Institutional Investor Journals
SP 14
OP 22
DO 10.3905/jpe.2018.21.3.014
VO 21
IS 3
A1 Giorgia Bulgarelli
A1 Gianfranco Gianfrate
YR 2018
UL https://pm-research.com/content/21/3/14.abstract
AB The authors investigate the impact of Sovereign Wealth Funds’ (SWFs) investments on the target firm’s bondholders. Their sample comprises 166 deals carried out during the period 2000–2016. They find that when SWFs invest in target companies, a reduction of the perceived credit risk follows and the value of the debt for existing bondholders rises. The market reaction for traded bonds appears to be positively associated with the level of transparency of the fund and to the rating of targets’ bonds. Overall, these results support the view that SWFs have a “certification role” for bondholders and determine a consistent increase in the value of invested firms that accrue to both shareholders and bondholders.TOPICS: Private equity, performance measurement, global, statistical methods