The Private Premium in Public Bonds

  title={The Private Premium in Public Bonds},
  author={Anna Kovner and Chenyang Wei},
  journal={Capital Markets: Asset Pricing & Valuation eJournal},
  • Anna Kovner, Chenyang (Jason) Wei
  • Published 2012
  • Capital Markets: Asset Pricing & Valuation eJournal
  • This paper is the first to document the presence of a private premium in public bonds. We find that spreads are 31 basis points higher for public bonds of private companies than for bonds of public companies, even after controlling for observable differences, including rating, financial performance, industry, bond characteristics and issuance timing. The estimated private premium increases to 40 to 50 basis points when a propensity matching methodology is used or when we control for fixed… CONTINUE READING


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