Underwriter Prestige, State Taxes, and Reoffering Yields of Municipal Bond Offerings

We examine the relationship between underwriter prestige and reoffer yields of new issue local government bonds using a sample of 2072 issues from 1999/2000. Underwriter prestige is measured as the rank of the size of total issues handled by the top 100 underwriters. We find that underwriter prestige is associated with higher reoffer yields. We provide evidence consistent with one explanation of this finding; the tendency of smaller underwriters to underwrite bonds that are tax-advantaged to local investors.

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	Allen, Arthur C Associate Professor of Accountancy Expertise: Financial Accounting Governmental and Nonprofit Accounting Accountancy CBA 388 P.O. Box 880488 University of Nebraska-Lincoln Lincoln, NE 68588-0488, USA Phone: (402) 472-3275 Fax: (402) 472-4100 aallen1@unl.edu	Allen, Arthur C	Accountancy