An Investigation of Underwriting Fees for Asset-Backed Securities

Gottesman, Aron; Puskar, David

doi:10.2139/ssrn.1369145

Cited by 2 publications

(1 citation statement)

References 35 publications

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“…Despite the nontrivial nature of issuance costs, the literature is sparse, particularly for municipal markets (Ang and Green 2011;Robbins and Simonsen 2011;Moldogaziev and Luby 2012). Studies of private sector issuance costs emphasize comparative costs in domestic versus international markets, underwriting fees, and asset-backed securities (Johnson, Morton, and Findlay 1975;Livingston and Jewell 1998;Iannotta and Navone 2008;Gottesman and Puskar 2009). Studies of public sector issuance costs focus on economies of scale in primary and secondary markets (Harris and Piwowar 2004;Robbins and Simonsen 2011), municipal versus corporate debt (Chakravarty and Sarkar 2003), and the method of sale (for a review, see Robbins 2002).…”

Section: Introductionmentioning

confidence: 99%

Determinants of the Credit Rating Fee in the Municipal Bond Market

Ely¹,

Martell²,

Kioko³

2013

Public Budgeting & Finance

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Improving transparency of prices paid by government can improve market and government efficiency. Governments regularly pay to access capital markets, yet municipal bond issuance costs remain largely hidden from public view. This study examines factors associated with credit rating fees using a decade of Texas municipal bond issuance data. We find that rating fees are lower in a competitive environment, when issuers have experience and a relationship with the rating agency, and higher when the issue is large and more complex. The findings provide evidence that credit rating agencies (CRAs) retained pricing power following the credit crisis despite reduced reputational quality.

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