The Value of Corporate Bond Listing

Brittany M. Cole; Nell S. Gullett

doi:10.47742/ijbssr.v5n3p1

Authors

Brittany M. Cole University of Tennessee at Martin
Nell S. Gullett University of Tennessee at Martin

DOI:

https://doi.org/10.47742/ijbssr.v5n3p1

Keywords:

corporate bond, bond market, exchange listing, bid-ask spread, earnings announcement

Abstract

We study the impact of bond exchange listing in U.S. publicly traded corporate bond markets. We find that listed corporate bonds have lower estimated bid-ask spreads than unlisted corporate bonds. Specifically, we show that listed bonds have estimated spreads of $0.14 lower than unlisted bond spreads. We find that execution venue matters for listed bonds, and that listed bond executions on the NYSE have higher trading costs than listed bond executions off-NYSE. We show that listed bonds are more volatile than unlisted bonds. Last, we study bond trading around earnings announcements and find a slight increase (decrease) in overall (institutional) volume on earnings announcement days compared to non-announcement days.

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