 Underwriter reputation and the pricing of securities: Evidence from asset-backed securitiesWenzhen Liu and Wenfeng Wu International Review of Financial Analysis, 2023, vol. 88, issue C Abstract: This paper investigates whether and how the underwriter reputation can affect the pricing of securities. Using data on collateralized loan obligations (CLO), asset-backed securities (ABS), and asset-backed medium-term notes (ABN) from 2014 to 2019 in China bond market, we find that the underwriter's reputation has a significantly negative impact on the issuance spread. This effect is more pronounced in the CLO and ABS markets, while that in the ABN market is not significant. Furthermore, we find that the originators play a critical role in determining the issuance spread of securities, as state-owned and listed originator receive a lower initial yield spread. In addition, the number of tranches and the proportion of subordination in a deal also have a stronger effect on the relation between which the underwriters' reputation and securities prices. These results suggest that underwriters play a role in reducing information asymmetry between originators and investors, which is partly corrected via underwriter reputation. Keywords: Asset-backed securities; Underwriter reputation; Deal structure characteristics; Originator characteristics (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:88:y:2023:i:c:s1057521923001953 DOI: 10.1016/j.irfa.2023.102679 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
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