The Value of Bond Underwriter Relationships

Stine Louise von Rüden, Jens Dick-Nielsen, Mads Stenbo Nielsen

Research output: Working paperResearch


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, information-sensitive issuers with high rollover exposure, i.e., those issuers most in need of certification by an underwriter.
Original languageEnglish
Place of PublicationKøbenhavn
PublisherDanmarks Nationalbank
Number of pages62
Publication statusPublished - Feb 2021
SeriesDanmarks Nationalbank. Working Papers


  • Refinancing risk
  • Credit risk
  • Financial stability

Cite this