We examine whether market perception of firms’ future default risk increases, as manifested in market measures of risk, upon issuance of the 2010 exposure draft (ED) proposing capitalization of most operating leases. Employing a difference-in-differences design, we find a significant increase in loan spread and credit default swap (CDS) premia for firms with high operating leases. Cross-sectional tests show the effect to be more pronounced in firms with lower disclosure reliability and longer lease maturity. This study innovates by considering anticipatory effects of exposure drafts.