Cash Holdings and Risky Access to Future Credit

A Note on Capital IQ's Credit Line Data

“…In Table , we show that using Capital IQ's reported undrawn credit does not fairly represent the number of firm‐year observations in which the sampled companies have either access to, or availability on, a corporate credit line when compared to what is reported in the 10‐K filings of the firm . Existing credit line papers (e.g., Garcia‐Appendini and Montoriol‐Garriga, ; Sun, ) use Capital IQ's Undrawn Revolving Credit to determine whether a firm has availability on a credit line that could fund future drawdowns. These papers record credit line availability as a binary variable equal to one when Undrawn Revolving Credit is positive.…”

“…For example, Ippolito and Perez (), Colla, Ippolito and Li (), Nini (), Acharya, Almeida, Ippolito and Perez (2014a,b), Berg, Saunders and Steffen (), Dudley and Qie (), McCumber (), Nikolov, Schmid and Steri (), and Tengulov () look at drawn amounts outstanding as reported in Capital IQ in various analyses of firms’ debt composition. Sun () and Garcia‐Appendini and Montoriol‐Garriga () employ Capital IQ to collect data on unused lines of credit as part of a measure of financial slack. Ippolito and Perez () and Acharya, Almeida, Ippolito and Perez (2014a,b) utilize Capital IQ to identify whether a firm has access to credit lines.…”