Eurobond Underwriter Spreads
AbstractWe examine the determinants of underwriter spreads on straight/fixed rate Eurobonds issued by U.S. 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 fees; and (iv) the choice of currency, with spreads higher in the less frequently utilized currencies and/or in currencies where underwriting activities are more concentrated.
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Bibliographic InfoPaper provided by Financial Markets Group in its series FMG Discussion Papers with number dp503.
Date of creation: Jun 2004
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Other versions of this item:
- 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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