GASB Mandatory Disclosure Rules and Municipal Bond Yield Spreads

35 Pages Posted: 5 Apr 2017

See all articles by Ali Nejadmalayeri

Ali Nejadmalayeri

University of Wyoming - College of Business

Sheri Faircloth

University of Nevada, Reno - College of Business Administration

Jeanne Wendel

University of Nevada, Reno - College of Business Administration

Surya Chelikani

Quinnipiac University

Date Written: July 7, 2013

Abstract

The implementation of the Government Accounting Standards Board’s Statement 45 mandates disclosure of other post-employment benefits in a standardized format. The mandate provides an opportunity to analyze non-information impacts of mandatory disclosures, as key components of the information were already publicly available. We find that this mandate is associated with a significant 15 and 73 basis-point increase in yield spreads among tax-exempt and taxable bonds, respectively. This effect is particularly more pronounced for riskier bonds — non-rated and longer maturity taxable bonds. However, states that do not follow the GASB 45 recommendation of prefunding the OPEB obligations face a greater increase in their yield spreads.

Keywords: Mandatory Disclosures, Municipal Bonds, Yields

JEL Classification: D82, G10, G18, H74, H75

Suggested Citation

Nejadmalayeri, Ali and Faircloth, Sheri and Wendel, Jeanne and Chelikani, Surya, GASB Mandatory Disclosure Rules and Municipal Bond Yield Spreads (July 7, 2013). Available at SSRN: https://ssrn.com/abstract=2290739 or http://dx.doi.org/10.2139/ssrn.2290739

Ali Nejadmalayeri (Contact Author)

University of Wyoming - College of Business ( email )

1000 E. University Avenue
Laramie, WY 82071
United States

Sheri Faircloth

University of Nevada, Reno - College of Business Administration ( email )

Reno, NV 89557-0016
United States
775-784-6993 ext. 305 (Phone)
775-784-1769 (Fax)

HOME PAGE: http://www.scsr.nevada.edu/~fairclos

Jeanne Wendel

University of Nevada, Reno - College of Business Administration ( email )

Reno, NV 89557-0016
United States
775-784-6695 (Phone)

HOME PAGE: http://equinox.unr.edu/homepage/wendel/

Surya Chelikani

Quinnipiac University ( email )

275 Mt. Carmel Avenue
Hamden, CT 06518
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
47
Abstract Views
898
PlumX Metrics