STOCK PRICE BEHAVIOR OF PURE CAPITAL STRUCTURE ISSUANCE AND CANCELLATION ANNOUNCEMENTS

I examine planned senior-for-junior and junior-for-senior transactions that are subsequently canceled. I find statistically significant stock returns for issuance and cancellation announcements that are positively related to the direction of the leverage change. The magnitude and direction of the returns differ from previous research. Discrepancies are attributed to different issuance purposes.