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Abstract
Executive Summary. The market's reaction to seventy-four real estate investment trust (REIT) straight debt issues between 1991 and 1997 is examined. No significant market reaction to straight debt issues on the announcement day is found. The findings also show that in univariate tests of announcement day returns, the market reaction to a straight debt issue is inversely related to the issuer's level of existing cash and inversely related to investment opportunities as measured by Tobin's q. These results differ from previous findings for industrial firms in Howton, Howton and Perfect (1998). The differences between REITs and industrials may be due to the regulatory structure of REITs.