Publication Type
Journal Article
Version
publishedVersion
Publication Date
2-2024
Abstract
We confirm prior evidence that bonds on average are offered at prices below their immediate post-offer secondary market prices. However, in cases where banks lead–manage their own bond offerings the underpricing is significantly less as compared with other non-self-marketed offerings. These findings are robust across various matched samples and selection models. Our results suggest that the bond offering process is characterized by substantive agency conflicts between shareholders of corporations (issuers) and underwriters.
Keywords
Underwriters, bonds, market prices
Discipline
Finance and Financial Management | Portfolio and Security Analysis
Research Areas
Finance
Publication
Journal of Financial and Quantitative Analysis
Volume
59
Issue
1
First Page
369
Last Page
394
ISSN
0022-1090
Identifier
10.1017/S002210902200151X
Publisher
Cambridge University Press
Citation
GOH, Jeremy C. and YANG, Lisa (Zongfei).
Do underwriters short-change corporations issuing bonds?. (2024). Journal of Financial and Quantitative Analysis. 59, (1), 369-394.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7372
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Additional URL
https://doi.org/10.1017/S002210902200151X