Issue Frequency and Corporate Bond Yields

Abstract

This paper finds that frequent bond issuers get significantly better pricing than infrequent issuers, with yield spread discounts of up to 117 basispoints. We document firms' bond issue frequencies for windows from one week to six years before the current issue and relate them to yield spreads. For very large firms, issue frequency in windows up to one year matters most, which is consistent with benefits through increasing market literacy. Reputation acquisition seems more relevant for regular firms, as it is beneficial for them to be a recent issuer. The results suggest there is a firm-specific optimal issue frequency.

Keywords: yields, bonds, security issuing

JEL Classification: G20, G24, G30