Publication Type

Journal Article

Version

publishedVersion

Publication Date

4-2024

Abstract

We find that for bond offerings that are non-self-marketed, there is a significantly larger proportion of institutional-sized sell trades than buy. In stark contrast, for self-marketed offerings by underwriters, immediate post-offer trading is characterized by a larger proportion of institutional-sized buy trades than sell. We also find evidence suggesting that retail investors, who are initially shut out of the offering deals, buy bonds in the secondary market at a higher price. Our evidence suggests that certain institutional investors receiving allocations of non-self-marketed offerings flip them for a quick profit. The systematic disparity in aftermarket trading immediately following self-marketed versus non-self-marketed bond offerings suggests that the offering process is inefficient, which may have implications on the sustainability of bond offering process.

Keywords

Bond IPO returns, bond aftermarket trading, bond market efficiency, bond market sustainability

Discipline

Corporate Finance | Finance and Financial Management

Research Areas

Finance

Publication

Pacific-Basin Finance Journal

Volume

137

Issue

1

First Page

875

Last Page

903

ISSN

0927-538X

Identifier

10.1016/j.jeem.2025.103276

Publisher

Elsevier

External URL

https://www.cambridge.org/core/journals/international-and-comparative-law-quarterly/article/salamislicing-and-issue-estoppel-foreign-decisions-on-the-governing-law/61B23E23D3315F0F1CD21CB34C7B8AC0#article

Additional URL

https://doi.org/10.1016/j.jeem.2025.103276

Download

Share

COinS