Underpricing in the corporate bond market

Review of Financial Studies

Volumn 20, Issue 6, 2007, Pages 2021-2046

  Cai, Nianyun ^a   Helwege, Jean ^b,d   Warga, Arthur ^c  

^a UNIVERSITY OF MICHIGAN DEARBORN   (United States)

^b PENNSYLVANIA STATE UNIVERSITY   (United States)

^c UNIVERSITY OF HOUSTON   (United States)

^d PENNSYLVANIA STATE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 35448940496     PISSN: 08939454     EISSN: 14657368     Source Type: Journal    
DOI: 10.1093/rfs/hhm048     Document Type: Article

References (41)

1. Alexander, G., A. Edwards, and M. Ferri. 2000. The Determinants of Trading Volume of High-Yield Corporate Bonds. Journal of Financial Markets 3:177-204.
2. Allen, F., and G. Faulhaber. 1989. Signaling by Underpricing in the IPO Market. Journal of Financial Economics 23:303-23.
3. Benveniste, L. M., and P. Spindt. 1989. How Investment Banks Determine the Offer Price and Allocation of New Issues. Journal of Financial Economics 24:341-61.
4. Benveniste, L. M., W. Busaba, and W. J. Wilhelm. 2002. Information Externalities and the Role of Underwriters in Primary Equity Markets. Journal of Financial Intermediation 11:61-86.
5. Boot, A. W. A., and A. V. Thakor. 1993. Security Design. Journal of Finance 48:1349-78.
6. Booth, J. R., and L. Chua. 1996. Ownership Dispersion, Costly Information and IPO Underpricing. Journal of Financial Economics 41:291-310.
7. Campbell, J. Y., and G. B. Taksler. 2003. Equity Volatility and Corporate Bond Yields. Journal of Finance 58:2321-49.
8. Carty, L. 1996. Is there a Reputation Effect in the U.S. Public Debt Market?: Columbia University mimeo.
9. Chaplinsky, S., and L. Ramchand. 2000. The Impact of Global Equity Offerings. Journal of Finance 55:2767-89.
10. Chemmanur, T. J., and I. Paeglis. 2005. Management Quality, Certification and Initial Public Offerings. Journal of Financial Economics 76:331-68.
11. Cornelli, F., and D. Goldreich. 2003. Bookbuilding: How Informative is the Order Book? Journal of Finance 58:1415-43.
12. Crabbe, L. E, and C. M. Turner. 1995. Does the Liquidity of a Debt Issue Increase with its Size? Evidence from the Corporate Bond and Medium-Term Note Markets. Journal of Finance 50:1719-34.
13. Datta, S., M. Iskandar-Datta, and A. Patel. 1997. The Pricing of Initial Public Offers of Corporate Straight Debt. Journal of Finance 52:379-96.
14. Diamond, D. W. 1989. Reputation Acquisition in Debt Markets. Journal of Political Economy 97:828-62.
15. Diamond, D. W. 1991. Monitoring and Reputation-The Choice Between Bank Loans and Directly Placed Debt. Journal of Political Economy 99:689-721.
16. Ederington, L. H. 1974. The Yield Spread On New Issues of Corporate Bonds. Journal of Finance 29:1531-43.
17. Ellul, A., and M. Pagano. 2006. IPO Underpricing and After-Market Liquidity. Review of Financial Studies 19:381-421.
18. Fung, W. K. H., and A. Rudd. 1986. Pricing New Corporate Bond Issues: An Analysis of Issue Cost and Seasoning Effects. Journal of Finance 3:633-43.
19. Grinblatt, M., and C Y. Hwang 1989. Signaling and the Pricing of Unseasoned New Issues. Journal of Finance 44:393-420.
20. Hale, G., and J. Santos. 2007. Evidence on the Costs and Benefits of Bond IPOs: New York Federal Reserve mimeo.
21. Helwege, J., and P. Kleiman. 1998. The Pricing of High-Yield Debt IPOs. Journal of Fixed Income 8:61-8.
22. Hong, G., and A. Warga, 2000. An Empirical Study of Bond Market Transactions. Financial Analysts Journal 56:32-46.
23. Jegadeesh, N., M. Weinstein, and I. Welch. 1993. An Empirical Investigation of IPO Returns and Subsequent Equity Offerings. Journal of Financial Economics 34:153-76.
24. Jenkinson, T., and H. Jones. 2004. Bids and Allocations in European IPO Bookbuilding. Journal of Finance 59:2309-38.
25. Krishnan, C N. V., P. H. Ritchken, and J. B. Thomson. 2005. Monitoring and Controlling Bank Risk: Does Risky Debt Help? Journal of Finance 60:343-78.
26. Lindvall, J. 1977. New Issue Corporate Bonds, Seasoned Market Efficiency and Yield Spreads. Journal of Finance 32:1057-67.
27. Loughran, T., and J. R. Ritter. 2004. Why has Underpricing Changed Over Time? Financial Management 33:5-37.
28. Maksimovic, V., and P. Pichler. 2001. Technological Innovation and Initial Public Offerings. Review of Financial Studies 14:459-94.
29. Masulis, R. 1988. The Debt/Equity Choice. Cambridge, MA: Ballinger.
30. Myers, S. C., and N. S. Majluf. 1984. Corporate Financing and Investment Decisions When Firms Have Information that Investors do not Have. Journal of Financial Economics 13:187-221.
31. Ritter, J. R., and I. Welch. 2002. A Review of IPO Activity, Pricing and Allocations. Journal of Finance 57:1795-828.
32. Rock, K. 1986. Why New Issues are Underprised. Journal of Financial Economics 15:187-212.
33. Sherman, A. E., and S. Titman. 2002. Building the IPO Order Book: Underpricing and Participation Limits with Costly Information. Journal of Financial Economics 65:3-29.
34. Sorenson, E. H. 1982. On the Seasoning Process of New Bonds: Some are More Seasoned than Others. Journal of Financial and Quantitative Analysis 42:195-208.
35. Spiess, D. K., and R. H. Pettway. 1997. The IPO and First Seasoned Equity Sale: Issue Proceeds, Owner/Managers' Wealth, and the Underpricing Signal. Journal of Banking & Finance 21:967-88.
36. Stoughton, N. M., K. P. Wong, and J. Zechner. 2001. IPOs and Product Quality. Journal of Business 74:375-408.
37. Wasserfallen, W., and D. Wydler. 1988. Underpricing of Newly Issued Bonds: Evidence from the Swiss Capital Market. Journal of Finance 43:1177-91.
38. Weinstein, M. I. 1978. The Seasoning Process of New Corporate Bond Issues. Journal of Finance 33:1343-54.
39. Welch, I. 1989. Seasoned Offerings, Imitation Costs, and the Underpricing of IPOs. Journal of Finance 44:421-49.
40. Welch, I. 1992. Sequential Sales, Learning, and Cascades. Journal of Finance 47:695-732.
41. White, H. S. 1980. A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity. Econometrica 48:817-38.