Debt Issuance in the Era of Passive Investment

• 成果类型: Article; Early Access
• 署名作者: Dathan, Michele; Davydenko, Sergei
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors; University of Toronto
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.01999
• 发表日期: 2025
• 关键词: debt financing; Corporate bonds; passive investment; ETFs

摘要

Passive bond funds provide predictable demand for newly issued corporate bonds included in popular indices. By issuing index-eligible bonds, firms can take advantage of this passive demand and improve bond characteristics unrelated to index eligibility. To this end, firms issue a disproportionate number of bonds with face value just sufficient to be included in major bond indices. Higher passive demand is associated with larger bonds. Following an increase in the index size threshold, some firms withdraw from the bond market while others respond by issuing larger bonds at the new threshold.