Bank Underwriting of Debt Securities: Modern Evidence

@article{Gande1997BankUO,
  title={Bank Underwriting of Debt Securities: Modern Evidence},
  author={A. Gande and M. Puri and A. Saunders and I. Walter},
  journal={Review of Financial Studies},
  year={1997},
  volume={10},
  pages={1175-1202}
}
This article examines debt securities underwritten by Section 20 subsidiaries of bank holding companies relative to those underwritten by investment houses. Consistent with a net certification effects for banks, bank underwriting of lower credit rated firms to whom the bank lends results in relatively higher prices (lower yields). We find no evidence of conflicts of interest even when an issue is used to repay bank debt. Further, banks bring a relatively larger proportion of small issues to the… Expand
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