Information and Liquidity of Over-the-Counter Securities: Evidence from Public Registration of Private Debt

摘要: The Rule 144A or non-bank private debt represents a significant and growing segment of the total U.S. bond market. A large fraction issues carry registration rights are subsequently publicly registered. We examine liquidity effects induced by enhanced information transparency registration. document three key results. (a) Following public debt, dealer-specific bid-ask spreads improve, more so for firms with higher ex-ante asymmetry; (b) trading activities subdued following registration, based on both volume frequency trading, regardless retail investors entering market; (c) dealers tend to reduce their net positions bonds. Our results imply that broadens market access simultaneously enlarges set all participants thereby lowering transaction costs. More may however discourage participation from institutional as they lose privilege uniquely accessing market, generating extracting rents such privilege. This in turn lead exiting supplying rest