Finance and Financial Management Commons^™

Liquidity In The 144a Debt Market, Karen Ann Craig

Doctoral Dissertations

This dissertation presents my research analyzing the liquidity component of corporate bond spreads for bonds issued privately under Rule 144A during the period 2003 – 2011. Rule 144A bonds are limited to trading among qualified institutional investors and therefore are inherently less liquid than registered corporate bonds. I assess an amendment to Rule 144 modifying the restrictions on public resale of Rule 144A bonds intended to increase the liquidity of 144A bonds and decrease the cost of capital to firms issuing these securities. This amendment provides an ideal exogenous shock to evaluate 144A bonds. Assessing the liquidity premiums and yield …