In the summer of 2007, the subprime empire that Wall Street had built all came crashing down. Banks like Countrywide and non-banks such as New Century Financial--all financed by Bear Stearns, Goldman Sachs, Merrill Lynch, Lehman Brothers and others--were in danger of closing, or actually...

This paper examines the role of repeat interactions between placement agents (investment banks) and investors in the initial pricing of convertible bonds. Under the assumption that attracting repeat investors can reduce search frictions in primary issue markets, we test the hypothesis that...