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Determinanten des Underwriting Spread bei internationalen Anleiheemissionen
Credit and Capital Markets – Kredit und Kapital, Vol. 39 (2006), Iss. 1 : pp. 117–148
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Volker G. Heinke
References
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Abstract
Determinants of the Underwriting Spread with International Loan Issues
This is the first article to provide an empirical analysis of the factors influencing the underwriting spread of lead banks in international loan floatings. The underwriting spread represents compensation to investment banks for a variety of services provided and the risks taken over by them. Empirically analysing the determinants of this essential component of issuing costs arising to companies has been neglected for the German segment of the Euro market so far. On the basis of univariate analyses and multiple regressions the various hypothetical factors influencing the underwriting spread have been tested. The results thereof show that loans with a low credit rating, with prolonged lifetimes and larger issue volumes give rise to a wider underwriting spread. On the other hand, this spread tends to contract as issuers record a higher frequency of loan issues and the number of issuing banks involved in consortia rises. Loans floated by German issuers have a significant cost advantage in the international primary market.