RT Journal Article SR Electronic T1 How New Bond Issuance Influences the Liquidity of Covered Bonds JF The Journal of Fixed Income FD Institutional Investor Journals SP 44 OP 60 DO 10.3905/jfi.2019.1.072 VO 29 IS 2 A1 Michael Weigerding YR 2019 UL https://pm-research.com/content/29/2/44.abstract AB This study shows how primary market supply influences the secondary market liquidity of outstanding bonds. Liquidity is higher around new bond issuance by the same issuer and in the same maturity segment. It rises once the new issue is priced and remains elevated for several days. The effect is mostly attributed to switch trades between old and new bonds. It increases by the volume issued and decreases by the amount of similar paper outstanding. The liquidity surge is positively linked to the new bond’s attractiveness; it is stronger during times of positive market sentiment.TOPICS: Project finance, statistical methods, credit risk managementKey Findings• Liquidity is higher around new bond issuance by the same issuer and in the same maturity segment.• The supply-liquidity effect increases by the volume issued and decreases by the amount of similar paper outstanding.• The liquidity surge is positively linked to the new bond's attractiveness, and it is stronger during times of positive market sentiment.