Underwriter Certification, Issuer-Underwriter Matching, and SEO Performance

55 Pages Posted: 7 Oct 2019

See all articles by Charles W. Calomiris

Charles W. Calomiris

Columbia University - Columbia Business School; National Bureau of Economic Research (NBER)

Yehuda (Yud) Izhakian

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance

Jaime F. Zender

University of Colorado at Boulder - Department of Finance

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Date Written: October 2019

Abstract

The introduction of deal types for issues of seasoned equity in which the offer follows quickly after its announcement highlights the role of underwriter certification in the performance of SEOs. Controlling for the matching between underwriters and issuers, underwriter quality is positively related to the announcement effect in rapidly completed SEOs. For these deal types, we also find that the discount is significantly negatively related to underwriter quality. For fully marketed deals we are unable to detect any significant relation between SEO performance and underwriter quality. Issuers pay for the value provided by high-quality underwriters with higher fees.

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Suggested Citation

Calomiris, Charles W. and Izhakian, Yehuda (Yud) and Zender, Jaime F., Underwriter Certification, Issuer-Underwriter Matching, and SEO Performance (October 2019). NBER Working Paper No. w26344. Available at SSRN: https://ssrn.com/abstract=3465361

Charles W. Calomiris (Contact Author)

Columbia University - Columbia Business School ( email )

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National Bureau of Economic Research (NBER)

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Yehuda (Yud) Izhakian

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance ( email )

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New York, NY 10010
United States

HOME PAGE: http://people.stern.nyu.edu/yizhakia/

Jaime F. Zender

University of Colorado at Boulder - Department of Finance ( email )

Boulder, CO 80309
United States
303-554-1665 (Phone)
303-492-4689 (Fax)

HOME PAGE: http://www-bus.colorado.edu/faculty/Zender/

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