Florian Nagler wins RAPS Best Paper Award at Cavalcade 2023

Inventory-Constrained Underwriters and Corporate Bond Offerings

Florian Nagler wins Review of Asset Pricing Studies Best Paper Award 2023 for his paper “Inventory-Constrained Underwriters and Corporate Bond Offerings”. The award was presented at the SFS Cavalcade North America 2023, at the University of Texas at Austin.


We empirically study how inventory constraints of underwriters affect corporate bond offerings. Using underwriter-insurer-level transaction data, we find that a more constrained underwriter is more likely to place a bond and increases the allocation in the primary market to an insurer with a stronger preexisting relationship. The same underwriter is also more likely to buy back part of an allocation from the same insurer within 6 to 12 months after an offering. Overall, by “parking” inventory to relationship investors in the primary market, underwriters mitigate the effect of their inventory constraints on firms’ bond financing costs.