Does It Make Any Difference Anymore? Competitive versus Negotiated Municipal Bond Issuance

Simonsen, William; Robbins, Mark D.

doi:10.2307/3110054

Cited by 45 publications

(50 citation statements)

References 2 publications

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“…The bond yields are higher for issues with higher risk characteristics, i.e., bonds with longer maturities, low ratings, and without bond insurance. Consistent with previous research, we find that the negotiated offerings have higher interest costs (Benson 1979;Simonsen and Robbins 1996). Bonds with callable provisions and without bank Model 2 examines the impact of social capital on bond yields 1 year before the rating downgrades of the major bond insurers.…”

Section: Association Between Social Capital and Bond Yieldssupporting

confidence: 85%

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Social Capital and the Municipal Bond Market

Tang

Jaggi

2016

J Bus Ethics

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We examine the influence of social capital in the municipal bond market. Defined as the norms and networks that encourage cooperation, social capital is a social construct which captures a region's level of altruism, trustworthiness, and propensity to honor obligations. We expect that municipalities with high social capital are more trustworthy and likely to honor their debt obligations, which will result in lower bond yields. Our findings confirm that the bonds issued by municipalities located in high social capital counties exhibit lower yields compared to the municipalities located in low social capital counties. Our findings are also supported by bond prices in the secondary market, which shows that bonds from the municipalities located in high social capital regions have higher prices. Additional tests reveal that the influence of social capital is stronger for general obligation bonds, suggesting that social capital matters more for bonds where the willingness of municipalities to pay taxes is an important factor. Lastly, we document that the bonds of municipalities in high social capital areas are less likely to have insurance, suggesting that social capital may act as a substitute for bond insurance.

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Section: Association Between Social Capital and Bond Yieldssupporting

confidence: 85%

“…In negotiated sales, an underwriting syndicate is selected to sell bonds to investors. Most studies suggest that the competitive bidding process results in lower interest costs (Benson 1979;Simonsen and Robbins 1996).…”

Section: Municipal Bond Marketmentioning

confidence: 99%

Social Capital and the Municipal Bond Market

Tang

Jaggi

2016

J Bus Ethics

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“…This article fills that gap by presenting the results of a study on the influence of internal control deficiencies on municipal bond borrowing costs. In addition to contributing to the literature on internal controls in government, this study also contributes to the growing literature on the influence of managerial characteristics of bond issuers on municipal bond borrowing costs (i.e., Simonsen and Robbins ; Simonsen, Robbins, and Helgerson ; Robbins ; Peng and Brucato ; Denison, Yan, and Zhao ; Robbins and Simonsen ; Fruits et al ).…”

Section: Literature Reviewmentioning

confidence: 91%

“…As control variables in the model, we included common control variables that are well known determinants of TIC and routinely found in the literature on municipal bonds’ issuance costs (Simonsen and Robbins ).…”

Section: Model Specificationmentioning

confidence: 99%

Internal Control Deficiencies and Municipal Borrowing Costs

Park¹,

Matkin²,

Marlowe³

2016

Public Budgeting & Finance

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“Internal controls” refer to organizational rules and procedures used to safeguard assets and to detect fraud, waste, and abuse. This study examines the relationship between internal control deficiencies and municipal bond borrowing costs. The most severe form of internal control deficiencies (i.e., material weaknesses) is associated with higher borrowing costs for municipal bonds, between 10 and 18 basis points. Credit ratings mediate some of the effect of material weaknesses in internal controls but the indirect effect is relatively small. The effect of internal control deficiencies on borrowing costs was consistent in the time period before and after the financial crisis.

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“…At that time, one in four (27.0%) will be age 65 or older. As the aged population of Hong Kong is growing rapidly, there is an understandable interest in all aspects of the aged population and especially their pattern of retirement migration, because it might bring enormous impacts in terms of the local economy Serow & Haas, 1992) and demand for public services (Simonsen & Robbins, 1996;Stallmann & Siegel, 1995) in both their destination and place of origin.…”

Section: Introductionmentioning

confidence: 99%

Cross-border retirement migration plan in Hong Kong middle-aged adults

Chou¹

2007

Habitat International

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Does It Make Any Difference Anymore? Competitive versus Negotiated Municipal Bond Issuance

Cited by 45 publications

References 2 publications

Social Capital and the Municipal Bond Market

Social Capital and the Municipal Bond Market

Internal Control Deficiencies and Municipal Borrowing Costs

Cross-border retirement migration plan in Hong Kong middle-aged adults

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