Newcastle University Business School

Event Item

Does bookrunner geography influence bond pricing? The benefits of locality

Date/Time: Thursday 8 December 2016, 15:00 - 18:00

Venue: Newcastle University Business School, Room 2.08

Speaker: Dr. Patrick McColgan, University of Strathclyde

Join us as we analyse how the geography of bookrunner syndicates affects the quality of their service to issuers as reflected in the pricing of euro-denominated bond tranches.

We find that domestic banks obtain lower at-issue credit spreads for issuing firms, highlighting the importance of ongoing banking relationships in achieving the highest quality of intermediary services.

This result holds for a large number of alternative measures of bank locality.

Tranches issued during the post-financial crisis period drive our findings.

Endogenous switching regressions show that the effect of bookrunner syndicate geography on bond pricing is economically important.

Research group: Finance, Accounting, Control and Evaluation