Do the equity holding and soundness of bank underwriters affect issue costs of SEOs?

Katsushi Suzuki

Journal of Banking & Finance, 2010, vol. 34, issue 5, 984-995

Abstract: This paper examines the effects of characteristics of bank underwriters on issue costs in seasoned equity offerings in Japan following deregulation in 1999. I find that banks' holding loans have a negative effect on price discounts and no effect on underwriting fees. However, banks' equity holdings have no effect on discount rates and a positive effect on underwriting fees. Furthermore, issuers with unhealthy banks pay higher discount rates, are more likely to be weak in their ex-post operating performance, and are less willing to switch underwriters. I conclude that the characteristics of banks have different effects on issue costs.

Keywords: Commercial; bank; Issue; cost; Certification; Conflicts; of; interest; Bargaining; power (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:34:y:2010:i:5:p:984-995

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