On the benefits of concurrent lending and underwriting

• 成果类型: Article
• 署名作者: Drucker, S; Puri, M
• 署名单位: Columbia University; Duke University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2005.00816.x
• 发表日期: 2005
• 页码: 2763-2799
• 关键词: Glass-Steagall Act; COMMERCIAL-BANKS; SCOPE; experience; economies

摘要

This paper examines whether there are efficiencies that benefit issuers and underwriters when a financial intermediary concurrently lends to an issuer while also underwriting its public securities offering. We find issuers, particularly noninvestment-grade issuers for whom informational economies of scope are likely to be large, benefit through lower underwriter fees and discounted loan yield spreads. Underwriters, both commercial banks as well as investment banks, engage in concurrent lending and provide price discounts, albeit in different ways. We find concurrent lending helps underwriters build relationships, increasing the probability of receiving current and future business.