On the Seasoning Process of New Bonds: Some Are More Seasoned than Others.

The article reports on two aspects of the equilibrium pricing of new and seasoned bonds. The first aspect is the analysis of the microeconomic determinants of newly issued or seasoned issue yield spreads like differences in coupon rates and call features. The second is the analysis of the macroeconomic determinants of yield spreads like economic growth, interest rate cycles, and changing marginal tax rates. The analysis includes multiple regression analysis to fit yield data for a sample of new corporate bonds.