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LUND UNIVERSITY LIBRARIES

Reputation, Repetition, and Return

Hadzic, Sanel LU and Garede, Markus LU (2025) BUSN79 20251
Department of Business Administration
Abstract
Abstract
Seminar date: 2025-06-04
Course: BUSN79, Degree Project in Accounting and Finance
Authors: Sanel Hadzic, Markus Garede
Key Words: Sustainability-linked bonds, use-of-proceeds, Yield Spreads, Information asymmetry, signalling.
Purpose: To investigate whether repeated issuance and a foreign currency influence the yield spread.
Methodology: An ordinary least squares (OLS) regressions is implemented on cross-sectional data. The regressions use a spread over benchmark as the dependent variable, with frequency of issuance and foreign currency as independent variables. The regression control for a range of firm-level characteristics (e.g., ESG score, debt-to-assets ratio) and bond-specific features (e.g., coupon rate, payment... (More)
Abstract
Seminar date: 2025-06-04
Course: BUSN79, Degree Project in Accounting and Finance
Authors: Sanel Hadzic, Markus Garede
Key Words: Sustainability-linked bonds, use-of-proceeds, Yield Spreads, Information asymmetry, signalling.
Purpose: To investigate whether repeated issuance and a foreign currency influence the yield spread.
Methodology: An ordinary least squares (OLS) regressions is implemented on cross-sectional data. The regressions use a spread over benchmark as the dependent variable, with frequency of issuance and foreign currency as independent variables. The regression control for a range of firm-level characteristics (e.g., ESG score, debt-to-assets ratio) and bond-specific features (e.g., coupon rate, payment frequency, tenor, face value), while also including for region, year, and industry fixed effects to account for unobserved heterogeneity.
Theoretical perspectives: The study draws from Efficient Market Hypothesis, Behavioural Economics, Agency Theory, and Singling Theory. From management and business ethics the following are also incorporated to the conceptual framework, stakeholder theory, and institutional and legitimacy theory.
Empirical foundation: The initial sample consisted of 393 individual SLBs from the period of 2019 to 2024. After excluding missing observations, the final sample consists of 331 SLBs. Furthermore, after accounting for a foreign currency as well, we receive 305 observations.
Conclusions: The study finds that repeated SLB issuance is linked to a lower yield spread, supporting signalling and reputation-based theories. Firms build credibility by demonstrating reporting competence and meeting sustainability targets, thereby reducing information asymmetry. Additionally, we find support that emerging markets can benefit from issuing an SLB in a foreign currency, while developed markets experience a small penalty instead, due to lower signalling value. (Less)
Please use this url to cite or link to this publication:
author
Hadzic, Sanel LU and Garede, Markus LU
supervisor
organization
alternative title
A study on sustainability-linked bond issuance and market reception
course
BUSN79 20251
year
type
H1 - Master's Degree (One Year)
subject
keywords
Sustainability-linked bonds, use-of-proceeds, Yield Spreads, Information asymmetry, signalling
language
English
id
9207627
date added to LUP
2025-07-01 11:35:44
date last changed
2025-07-01 11:35:44
@misc{9207627,
  abstract     = {{Abstract
Seminar date: 2025-06-04
Course: BUSN79, Degree Project in Accounting and Finance
Authors: Sanel Hadzic, Markus Garede
Key Words: Sustainability-linked bonds, use-of-proceeds, Yield Spreads, Information asymmetry, signalling.
Purpose: To investigate whether repeated issuance and a foreign currency influence the yield spread.
Methodology: An ordinary least squares (OLS) regressions is implemented on cross-sectional data. The regressions use a spread over benchmark as the dependent variable, with frequency of issuance and foreign currency as independent variables. The regression control for a range of firm-level characteristics (e.g., ESG score, debt-to-assets ratio) and bond-specific features (e.g., coupon rate, payment frequency, tenor, face value), while also including for region, year, and industry fixed effects to account for unobserved heterogeneity.
Theoretical perspectives: The study draws from Efficient Market Hypothesis, Behavioural Economics, Agency Theory, and Singling Theory. From management and business ethics the following are also incorporated to the conceptual framework, stakeholder theory, and institutional and legitimacy theory.
Empirical foundation: The initial sample consisted of 393 individual SLBs from the period of 2019 to 2024. After excluding missing observations, the final sample consists of 331 SLBs. Furthermore, after accounting for a foreign currency as well, we receive 305 observations.
Conclusions: The study finds that repeated SLB issuance is linked to a lower yield spread, supporting signalling and reputation-based theories. Firms build credibility by demonstrating reporting competence and meeting sustainability targets, thereby reducing information asymmetry. Additionally, we find support that emerging markets can benefit from issuing an SLB in a foreign currency, while developed markets experience a small penalty instead, due to lower signalling value.}},
  author       = {{Hadzic, Sanel and Garede, Markus}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Reputation, Repetition, and Return}},
  year         = {{2025}},
}