Overallocation and secondary market outcomes in corporate bond offerings

• 成果类型: Article
• 署名作者: Bessembinder, Hendrik; Jacobsen, Stacey; Maxwell, William; Venkataraman, Kumar
• 署名单位: Arizona State University; Arizona State University-Tempe; Southern Methodist University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2022.08.001
• 发表日期: 2022
• 页码: 444-474
• 关键词: Primary market; Corporate bonds; Bond microstructure; Greenshoe; Overallocation

摘要

Bond underwriters, lacking Greenshoe options and formal systems to track flipping ac-tivity, have fewer tools than equity underwriters to manage secondary market order flow uncertainty. We show that bond underwriters respond by selectively overallocating some issues to attain net short positions. Overallocations are economically substantive, facilitate the syndicate's price stabilization efforts, and are largely offset in the days after issuance. These issues on average experience more net selling by institutional investors and, despite large syndicate purchases, appreciate less in the secondary market. Thus, overallocation is an observable indicator that underwriters anticipate weakness in net secondary market demand.(c) 2022 Elsevier B.V. All rights reserved.