Phantom Bookrunners Surface in IPOs

Tunick, Britt Erica
December 2004
Investment Dealers' Digest;12/13/2004, Vol. 70 Issue 48, p10
Trade Publication
The article reports that banks that do not work but collect fees and league-table credit as rewards from corporate clients, have made their way into the world of initial public offerings. The practice is expected to pick up steam in 2005 and deal a damaging blow to the credibility of league-table rankings. The phenomenon traces back to the bursting of the dot-com bubble, when issuers suddenly found them in the driver's seat. The emergence of phantom bookrunners in other asset classes, such as follow-on and convertible offerings, has been a gradual one over the last couple of years. Needless to say, genuine bookrunners are less than thrilled to be splitting their fees with firms that aren't doing any work.


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