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- Title
Market Uncertainty and the Least-Cost Offering Method of Public Utility Debt: A Note.
- Authors
FABOZZI, FRANK J.; MORAN, EILEEN; MA, CHRISTOPHER K.
- Abstract
The article focuses on the capital market uncertainty and the least-cost offering method of public utility debt in the U.S. The choice of offering method, competitive bidding or negotiated offering, for the issuance of new securities by public utilities is subject to approval by its regulators. The Federal Energy Regulatory Commission requires competitive bidding on all new securities issued by electric utilities. Regulators believe that competitive bidding will lead to lower overall interest costs. The article provides additional evidence on the importance of market uncertainty in the method of offering controversy using a sample from a more recent time period that includes a more volatile interest rate environment than in previous studies.
- Subjects
UNITED States; CAPITAL market; PUBLIC utilities; SECURITIES trading; MONEY market; ELECTRIC utilities; CORPORATE finance; UNITED States. Federal Energy Regulatory Commission; CAPITAL intensive industries; INDEPENDENT regulatory commissions; FINANCIAL markets; INTEREST rates
- Publication
Journal of Finance (Wiley-Blackwell), 1988, Vol 43, Issue 4, p1025
- ISSN
0022-1082
- Publication type
Article
- DOI
10.1111/j.1540-6261.1988.tb02620.x