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- Title
Eurobond underwriter spreads.
- Authors
Esho, Neil; Kollo, Michael G.; Sharpe, Ian G.
- Abstract
We examine the determinants of underwriter spreads on straight/fixed rate Eurobonds issued by US 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 spreads; and (iv) the choice of currency, with spreads higher in the less frequently used currencies and/or in currencies where underwriting activities are more concentrated.
- Subjects
UNITED States; EUROBOND market; SPREAD (Finance); FOREIGN exchange market; RISK exposure; BOND market laws; EFFICIENT market theory; BUSINESS research
- Publication
Accounting & Finance, 2006, Vol 46, Issue 1, p71
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/j.1467-629X.2006.00162.x