Do multi-market offerings lower the cost of capital? : evidence from global bond issuance by U.S.firms /
This study examines the impact of global bond offerings on a firm's cost of capital, issuing costs (gross spreads) and shareholder wealth. Global bonds are very large bond offerings placed simultaneously in the U.S. and Eurobond markets at the same price and are unique in that they are fungible...
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| Format: | Thesis Book |
| Language: | English |
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[Place of publication not identified] :
[publisher not identified] ;
2002.
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| Online Access: | http://proxy.library.tamu.edu/login?url=http://proquest.umi.com/pqdweb?did=777307871&sid=1&Fmt=2&clientId=2945&RQT=309&VName=PQD |
| Summary: | This study examines the impact of global bond offerings on a firm's cost of capital, issuing costs (gross spreads) and shareholder wealth. Global bonds are very large bond offerings placed simultaneously in the U.S. and Eurobond markets at the same price and are unique in that they are fungible across international markets. Using a sample of 87 global bond issues made by U.S. firms over the period 1996-2001, I find evidence that suggests that firms are able to lower their cost of (debt) capital by issuing these multi-market securities, and that this benefit is associated with the increased liquidity and lower issuing costs of these instruments. Finally, I document that the stock price reaction to the announcement of global bond issuance is positive and significant, while comparable domestic and Eurobond issues by U.S. firms over the same time period are associated with zero changes in shareholder wealth. Overall, my findings suggest that issuing global securities is associated with significant benefits. |
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| Item Description: | Vita. "Major Subject: Finance". |
| Physical Description: | ix, 76 leaves ; 28 cm. Issued also on microfiche from University Microfilm Inc. |
| Bibliography: | Includes bibliographical references (leaves 46-48). |