The option market reaction to bank loan announcements

In this study, we examine the options market reaction to bank loan announcements for the population of US firms with traded options and loan announcements during 1996-2010. We get evidence on a significant options market reaction to bank loan announcements in terms of levels and changes in short-term implied volatility and its term structure, and observe significant decreases in short-term implied volatility, and significant increases in the slope of its term structure as a result of loan announcements. Our findings appear to be more pronounced for firms with more information asymmetry, lower credit ratings and loans with longer maturities and higher spreads. Evidence is consistent with loan announcements providing reassurance for investors in the short-term, however, over longer time horizons, the increase in the TSIV slope indicates that investors become increasingly unsure over the potential risks of loan repayment or uses of the proceeds.

Co-eruptive and inter-eruptive surface deformation measured by satellite radar interferometry at Nyamuragira volcano, D.R. Congo, 1996 to 2010.

Interferometric Synthetic Aperture Radar (InSAR) measurements of surface deformation at Nyamuragira Volcano between 1996 and 2010 reveal a variety of co-eruptive and inter-eruptive signals. During 7 of the 8 eruptions in this period deformation was measured that is consistent with the emplacement of shallow near-vertical dykes feeding the eruptive fissures and associated with a NNW-trending fissure zone that traverses the summit caldera. Between eruptions the caldera and the summit part of this fissure zone subsided gradually (b3–5 cm/year). We also find evidence of post-eruption subsidence around the sites of the main vents of some flank eruptions (2002, 2004, 2006, and 2010). In the 6 months prior to the 2010 eruption a10-km wide zone centred on the caldera inflated by 1–2 cm. The low magnitude of this signal suggests that the presumed magma reservoir at 3–8 km depth contains highly compressible magma with little stored elastic strain energy. To the north of the caldera the fissure zone splits into WNW and NE branches around a zone that has a distinct InSAR signal. We interpret this zone to represent an elevated, 'stable' block of basement rocks buried by lavas within the Rift Zone.