The impact of lending relationships on the choice and structure of bond underwriting syndicates

Santiago Carbó-Valverde, Pedro Cuadros-Solas () and Francisco Rodríguez-Fernández
Authors registered in the RePEc Author Service: Santiago Carbo Valverde

Journal of International Financial Markets, Institutions and Money, 2021, vol. 74, issue C

Abstract: This paper examines the multiple-bookrunning phenomenon by focusing on the role of firm–bank relationships. Using a sample of European corporate bonds from 2003 to 2013, we show that the existence and strength of prior firm–bank relationships affects the multiple-bookrunning choice. Firms with strong (more concentrated) lending relationships are less likely to issue a multiple-bookrunner bond. Nevertheless, during the GFC crisis, the opposite effect is found. Issuer–bank relationships have a larger impact on issuers' selection of bookrunners during the crisis than before the crisis. However, reputable bookrunners refrain from becoming joint bookrunners if they are matching with less reputable counterparts.

Keywords: Bookrunners; Underwriting; Relationships; Multiple bookrunning; Bonds (search for similar items in EconPapers)
JEL-codes: G21 G32 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:74:y:2021:i:c:s1042443121001207

DOI: 10.1016/j.intfin.2021.101403

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