Esho, Neil, Kollo, Michael G. and Sharpe, Ian G. (2004) Eurobond underwriter spreads. Discussion paper, 503. Financial Markets Group, London School of Economics and Political Science, London, UK.
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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.
|Item Type:||Monograph (Discussion Paper)|
|Additional Information:||© 2004 The Authors|
|Uncontrolled Keywords:||Underwriter spread, Eurobonds, Governing law|
|Library of Congress subject classification:||H Social Sciences > HG Finance
H Social Sciences > HB Economic Theory
|Journal of Economic Literature Classification System:||G - Financial Economics > G2 - Financial Institutions and Services > G24 - Investment Banking; Venture Capital; Brokerage; Rating Agencies
G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets
|Sets:||Research centres and groups > Financial Markets Group (FMG)
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