Eurobond underwriter spreads

Esho, Neil, Kollo, Michael G. and Sharpe, Ian G. (2004) Eurobond underwriter spreads. Financial Markets Group Discussion Papers (503). Financial Markets Group, The London School of Economics and Political Science, London, UK.

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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.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://www.fmg.ac.uk/
Additional Information:	© 2004 The Authors
Divisions:	Financial Markets Group
Subjects:	H Social Sciences > HG Finance H Social Sciences > HB Economic Theory
JEL classification:	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
Date Deposited:	06 Aug 2009 09:36
Last Modified:	11 Dec 2024 18:38
URI:	http://eprints.lse.ac.uk/id/eprint/24744

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