Eurobond Underwriter Spreads

Neil Esho () and Ian Sharpe

FMG Discussion Papers from Financial Markets Group

Abstract: We examine the determinants of underwriter spreads on straight/fixed rate Eurobonds issued by U.S. 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 fees; and (iv) the choice of currency, with spreads higher in the less frequently utilized currencies and/or in currencies where underwriting activities are more concentrated.

Date: 2004-06
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Related works:
Journal Article: Eurobond underwriter spreads (2006)
Working Paper: Eurobond underwriter spreads (2004)
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