Competitive versus Negotiated Municipal Revenue Bond Issues: An Investigation of Underpricing
比较了竞争性投标与协商发行的市政收益债券的再发行收益率和净利息成本，发现协商发行的债券收益率和成本更高，但二级市场未出现预期中的价格调整，表明一级市场的收益率差异并非由抑价引起。
* This study of new issues of municipal revenue bonds has two objectives. The first objective is to compare reoffering yields and net interest cost of municipal revenue bonds sold by competitive bid with comparable bonds sold by negotiation. Previous studies suggest that primary market yields for comparable issues may be higher on negotiated issues than on competitive issues (see [2], [3], [5], [6], [7], [11], and [12]). Results presented here indicate that negotiated issues have higher reoffering yields and net interest costs than competitive issues receiving three or more bids, ceteris paribus. A second objective is to analyze the yield adjustments as the bonds move from the primary to the secondary market. Past researchers have attributed the primary market yield differential between competitive and negotiated bonds to underpricing of negotiated bonds. However, if the yield differential between competitive and negotiated issues is in fact due to underpricing, yields on negotiated issues should decrease relative to other issues in the secondary market. No evidence of this price adjustment for negotiated issues is found. This suggests that the primary market yield differential is not due to underpricing. One explanation for yield differences on the primary market that do not result in relative price adjustments on the secondary market is an inadequate specification of uncertainty in the model. West and Fabozzi [19] note a relationship between the level of uncertainty and the prevalence of negotiation. If uncertainty is not adequately specified in the primary market, the variables indicating the method of issue and the number of bids could be picking up this difference in the level of uncertainty. Differences in uncertainty could result from differences in general economic conditions across issues or differences in issuers' previous market activity and hence underwriters' familiarity with them. Issues subject to less uncertainty may thus tend to go competitive and receive more bids. Section I discusses the determinants of municipal bond interest cost on the primary market and the determinants of yield adjustments on the secondary market. Section II presents the empirical analysis. A brief summary of the results is given in Section III.