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This study measures the announcement effect of corporate bond issuance on stock returns for companies listed on the Santiago de Chile Stock Exchange (BCS). The sample is made up of 29 firms and 87 corporate bond issuance announcements during the 2010-2017 period. The announcement effect of corporate bond issuance on stock return is measured by an event study. This methodology allows to calculate abnormal returns for the days of the event period. The results show that the average abnormal return on the day of the announcement is negative (between -0.09% and -0.03%), but it is not statistically significant. However, the average abnormal return on the day after the announcement is positive (between 0.27% and 0.32%) and has statistical significance. The significant and positive average abnormal return on the day after the announcement suggests a late market reaction. The study shows that there is a significant signaling effect of bond issuance announcements on stock returns.

Edinson Edgardo Cornejo-Saavedra, Universidad del Bío-Bío

Assistant Professor, Business Management Department, Faculty of Business, Universidad del Bío-Bío, Chillán, Chile. Bachelor of Business, Universidad Adventista de Chile, Chillán, Chile, Master of Business Administration, Universidad Alberto Hurtado, Chile – Loyola University Maryland, USA.

Jorge Andrés Muñoz Mendoza, Universidad de Concepción

Assistant Professor, Business Management Department, School of Sciences and Technologies, Universidad de Concepción, Chile. Bachelor of Business, Universidad del Bío-Bío, Chile, Master of Economics, Universidad de Concepción, Chile.

Carlos Leandro Delgado Fuentealba, Universidad de Concepción

Instructor, School of Business and Administration, Universidad de Concepción, Chillán, Chile Bachelor of Economics, Universidad de la República Oriental del Uruguay, Montevideo, Uruguay. Master of Business Administration, Universidad de Concepción, Chile.

Sandra María Sepúlveda Yelpo, Universidad de Concepción

Assistant Professor, Business Management Department, School of Sciences and Technologies Universidad de Concepción, Chile. Bachelor of Economics, Universidad de la República Oriental del Uruguay, Montevideo, Uruguay. Master of Business Administration, Universidad de Concepción, Chile.

Carmen Lissette Veloso Ramos, Universidad de Concepción

Academic Collaborator, Business Management Department, School of Sciences and Technologies, Universidad de Concepción, Los Ángeles, Chile. Certified Public Accountant, Universidad del Bío-Bío, Chile, Master of Business Administration, Universidad de Concepción, Chile.

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