Eurobond underwriter spreads
AbstractWe examine the determinants of underwriter spreads on straight/fixed rate Eurobonds issued by US firms between 1990 and 1998. We find that underwriter spreads are influenced by: (i) the governing law as it influences the timely and orderly renegotiation of contract terms, with bonds governed by English law having significantly lower spreads; (ii) the distribution mechanism, with spreads higher on public issues than private placements; (iii) underwriter reputation, with more reputable underwriters charging higher spreads; and (iv) the choice of currency, with spreads higher in the less frequently used currencies and/or in currencies where underwriting activities are more concentrated. Copyright The Authors Journal compilation (c) 2006 AFAANZ.
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Bibliographic InfoArticle provided by Accounting and Finance Association of Australia and New Zealand in its journal Accounting and Finance.
Volume (Year): 46 (2006)
Issue (Month): 1 ()
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Other versions of this item:
- Neil Esho & Ian Sharpe, 2004. "Eurobond Underwriter Spreads," FMG Discussion Papers dp503, Financial Markets Group.
- Neil Esho & Michael G. Kollo & Ian G. Sharpe, 2004. "Eurobond underwriter spreads," LSE Research Online Documents on Economics 24744, London School of Economics and Political Science, LSE Library.
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
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