Tax-subsidized underpricing: The market for Build America Bonds

Détails

ID Serval
serval:BIB_754BD2304AC3
Type
Article: article d'un périodique ou d'un magazine.
Collection
Publications
Institution
Titre
Tax-subsidized underpricing: The market for Build America Bonds
Périodique
Journal of Monetary Economics
Auteur(s)
Cestau D., Green R.C., Schuerhoff N.
ISSN
0304-3932
Statut éditorial
Publié
Date de publication
2013
Peer-reviewed
Oui
Volume
60
Numéro
5
Pages
593-608
Langue
anglais
Résumé
Build America Bonds (BABs) were issued by municipalities for 20 months as a part of the 2009 fiscal package. Unlike traditional tax-exempt municipals, BABs are taxable to the holder, but the Treasury rebates 35% of the coupon to the issuer. The stated purpose was to provide municipalities access to a more liquid market including foreign, tax-exempt, and tax-deferred investors. We find BABs do not exhibit greater liquidity than traditional municipals. BABs are more underpriced initially, particularly for interdealer trades. BABs also show a substitution from underwriter fees toward more underpricing, suggesting that the underpricing is a strategic response to the tax subsidy.
Web of science
Création de la notice
10/05/2017 14:18
Dernière modification de la notice
21/08/2019 5:12
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