Orderbook demand for corporate bonds

Arthur Krebbers, Andrew Marshall, Patrick McColgan, Biwesh Neupane

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We examine the determinants of investor demand for corporate bond offerings using novel data on the primary market orderbook size. We find that credit risk and bond market presence are significant in explaining investor demand. These effects are more pronounced during the crisis periods including the global financial crisis and eurozone crisis as well as during the post-crisis periods. Our results also highlight the size of the bond investor order depends on information asymmetry costs and the benefit of diversifications, as investor demand is lower for new issuers as well as very frequent issuers. The levels of investor demand have important economic consequences for bond issuers as high investor demand shortens the time to subsequent bond issues and potentially reduces the firm's cost of capital at issuance.
Original languageEnglish
JournalEuropean Financial Management
Early online date9 Jul 2022
Publication statusE-pub ahead of print - 9 Jul 2022

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  • bond pricing
  • investor demand
  • orderbook size
  • oversubscription


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