Passive bond funds provide predictable demand for newly issued corporate bonds included in popular indices. By issuing index-eligible bonds, firms can take advantage of this passive demand and improve bond characteristics unrelated to index eligibility. To this end, firms issue a disproportionate number of bonds with face value just sufficient to be included in major bond indices. Higher passive demand is associated with larger bonds, lower spreads, and fewer covenants. Following an increase in the index size threshold, some firms withdraw from the bond market while others respond by issuing larger-than-expected bonds.

The declining number of U.S. public companies has attracted concern from regulators, prompting changes to make the IPO process more attractive. One set of changes (the JOBS Act) was designed to reduce IPO costs by allowing eligible firms to test the waters with investors and reduce disclosure, both of which increase firms' information advantage over investors. We model firm behavior in response to this increased information advantage and using a difference-in-difference setting, we show that while these changes have benefited some firms, they have led to a decrease rather than an increase in the number of firms going public. 

Passive investors participate in new issues for U.S. corporate bonds, despite these bonds not being added to benchmark indices on the offering date. We show that passive funds receive higher allocations in less attractive offerings: bonds with lower underpricing (including cold offerings), bonds from issuers whose debt and equity underperform in a one-year horizon, and bonds with fewer covenants. Allocations of underperforming bonds to passive funds is driven by both underwriters and fund families.

We use a merged global data set of security-level corporate bond issuance and firm-level financial statement data to examine how nonfinancial corporate bond issuance patterns during the COVID pandemic compared to those observed in previous crises across firms and countries. In contrast to other periods of acute financial stress, we find that firms in all regions were more likely to issue bonds during COVID relative to non-crisis periods. Further, we find that increased issuance was driven by less risky firms in advanced economies but by riskier firms in emerging economies. We explore potential channels that explain corporate bond issuance patterns, such as firm characteristics, interest rates, market stress and supply of capital. Finally, we examine the evolution of firm financial ratios around the COVID pandemic.

In underwriting seasoned equity offerings (SEOs), financial intermediaries can choose to act as market makers, where they buy shares from a seller on their own account without knowing who the ultimate buyers will be (a "bought deal").  In contrast, intermediaries can choose to act only as matchmakers, simply introducing sellers and buyers who negotiate the sale of shares (a "marketed deal").  In this paper, I examine the determinants of the choice of form of intermediation and its impact on sellers, underwriters and buyers.  First, I find that the choice is influenced by proxies for seller bargaining power, underwriter competition, and buyer valuation dispersion.  Second, I find that bought deals result in some inefficient deals taking place.  Finally, I show that the form of intermediation affects the division of surplus between sellers, underwriters and buyers, and that bought deals result in a larger share to sellers at the expense of underwriters.