Bank loan sales lead to borrower bankruptcy, stock drops, and negative certification.
The study looked at how banks selling loans of their borrowers affects the borrowers' stock prices. They found that when banks sell loans, especially bad ones, borrowers' stock prices drop, and many of them end up going bankrupt. This suggests that news of loan sales is seen as a bad sign for the companies involved. Interestingly, the banks selling the loans don't seem to be affected much by the sales.