The Value of Bond Underwriter Relationships

Research output: Contribution to conferencePaperResearchpeer-review


We show that corporate bond issuers benefit from utilizing existing underwriter relationships when rolling over bonds, but at the same time become exposed to underwriter distress. A strong relationship enables the underwriter to credibly certify the issuer resulting in lower direct issuance costs and lower underpricing. However, if the underwriter becomes distressed, this spills over to the issuer's credit risk, because it weakens the relationship and increases the risk of involuntary relationship termination. The credit risk spillover is more pronounced for risky, opaque issuers with high rollover exposure, i.e., those issuers most in need of certification by an underwriter.
Original languageEnglish
Publication date2017
Number of pages44
Publication statusPublished - 2017
EventThe 15th International Paris December Finance Meeting - Novotel Paris les Halles hotel, Paris, France
Duration: 21 Dec 201721 Dec 2017
Conference number: 15


ConferenceThe 15th International Paris December Finance Meeting
LocationNovotel Paris les Halles hotel
Internet address


  • Underwriter relationship
  • Corporate bonds
  • Certification
  • Rollover risk
  • Relationship banking

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