The Reputable Underwriting Matching in Corporate Bond Issuances: Evidence for Non-financial Bonds

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

Chapter 5 in Bank Funding, Financial Instruments and Decision-Making in the Banking Industry, 2016, pp 95-115 from Palgrave Macmillan

Abstract: Abstract This paper provides an insight into the role of underwriter reputation in debt markets and analyzes the bonds features with reference to underwriter reputation. We present an overview of the corporate bonds markets in Europe during 2007–2013 that argues in favor of the existence of differences in bond terms based on underwriters’ reputation. Using a sample of 1,196 non- financial corporate bonds issued in 18 European countries from 2007 to 2013, we find that European corporate bonds are statistically different by underwriter reputation in bond size, maturity, callability, and collateralization. Specifically, more reputable underwriters place bonds with larger proceeds, longer maturity, and including a call option. Our findings confirm that firms and underwriters are not randomly matched in debt markets; underwriters’ reputation plays a role in the allocation of bonds.

Keywords: Market Share; Capital Market; Call Option; Corporate Bond; League Table (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-319-30701-5_5

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DOI: 10.1007/978-3-319-30701-5_5

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