Investment bank reputation and issuance fees: evidence from asset-backed securities

Nodirbek Karimov (), Alper Kara () and Gareth Downing ()
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Nodirbek Karimov: University of Huddersfield
Alper Kara: Brunel University London
Gareth Downing: Manchester Metropolitan University

Review of Quantitative Finance and Accounting, 2025, vol. 65, issue 2, No 4, 599-618

Abstract: Abstract We examine the relationship between investment bank (IB) reputation and fees paid in ABS issuance. We compile an extensive instrument level dataset of over 35,000 ABS issued between 1997 and 2018 in the US and the European market. We find that reputation of IBs is influential in determining the compensation they are paid for their services in ABS issuance. On average, reputable IBs receive 3.74% higher fees in comparison to others. Moreover, our results show IBs’ ability to obtain lower initial yield spreads in ABS issuance. Overall, our findings provide evidence to the arguments that reputable IBs with high market presence offer high-quality services and assurance to the market participants (i.e., certification effect) leading to better deals. In return, they are able to charge higher fees.

Keywords: Securitisation; Investment banks; Reputation; ABS pricing (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11156-024-01354-5

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