Do you see what I see? Transparency and Bond Issuing Costs

UNIVERSITY OF TECHNOLOGY SYDNEY
Finance Department
Research Seminars in Finance

Topic: Do you see what I see? Transparency and Bond Issuing Costs

Speaker: James Brugler, University of Melbourne

Abstract:  Using the staggered implementation of the Trade Reporting and Compliance Engine (TRACE) as a natural experiment, we find that bonds issued in a transparent environment receive higher prices and have lower underpricing relative to control bonds issued in the opaque, pre-TRACE environment. We demonstrate that new bond issues with relatively more public information regarding recent secondary market trades in comparable “matrix” bonds receive better pricing, that customer trades in the secondary market become substantially more informed after TRACE, and that sub-categories of new bond issues with more asymmetric information have the most significant improvement in issuing costs. Together, these point to the mitigation of information asymmetry as the key driver of lower issuing costs.

Date: Wednesday, 7 August 2019
Time: 12.00 – 1.00 p.m.
Venue: University of Technology, Sydney
               Building 8, Room 08.002, Dr Chau Chak Wing Building
               Dr Chau Chak Wing Building
              14 - 28 Ultimo Road, Ultimo

Co-ordinator: Claire Liu  (Ph: +61 2 9514 7748)

Enquiries: Mala Kapahi (Ph: +61 2 9514 7777)

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Acknowledgement of Country

UTS acknowledges the Gadigal people of the Eora Nation, the Boorooberongal people of the Dharug Nation, the Bidiagal people and the Gamaygal people, upon whose ancestral lands our university stands. We would also like to pay respect to the Elders both past and present, acknowledging them as the traditional custodians of knowledge for these lands.