Eurobond underwriter spreads

Neil Esho (), Michael G. Kollo and Ian G. Sharpe

Accounting and Finance, 2006, vol. 46, issue 1, pages 71-95

Abstract: We 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.

Date: 2006

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Related works:
Working Paper: Eurobond Underwriter Spreads (2004)
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