Hidden champions or black sheep? The role of underpricing in the German mini-bond market

被引：0

作者：

Mark Mietzner

Juliane Proelss

Denis Schweizer

机构：

[1] Zeppelin University,Department of Corporate, Management and Economics

[2] TU Darmstadt,Department of Business Administration, Economics and Law

[3] Concordia University,John Molson School of Business Building

[4] Concordia University,John Molson School of Business Building

来源：

Small Business Economics | 2018年 / 50卷

关键词：

Credit risk; Financing gap; Mini-bonds; Mittelstand; Ratings inflation; Small medium-sized enterprises (SMEs); G12; G30; G32;

D O I：

暂无

中图分类号：

学科分类号：

摘要：

This paper presents a first empirical examination of all available German mini-bond offerings between 2010 and 2015. We compare the default probability according to a mini-bond’s initial rating with that implied by credit risk models and show that rating agencies can create rating inflation by issuing overly favorable ratings. This creates a favorable opportunity for lower quality firms to compete for funding. In this environment, high-quality firms have an incentive to use mini-bond underpricing to signal their quality. Our data highlight that, according to information-based corporate finance theory, higher underpricing is correlated with higher quality mini-bond issuer`s and lower early default rates.

引用

页码：375 / 395

页数：20