Bank loan sales lead to borrower bankruptcy, stock drops, and negative certification.
The study looked at what happens when a bank sells a borrower's loans. They found that when this happens, the borrower's stock prices go down, especially if the loans were not doing well. Many of these borrowers end up going bankrupt after the loan sale. This suggests that news of a bank loan sale is seen as a bad sign for the companies whose loans are sold. Interestingly, the banks selling the loans are not really affected by this.