Strategic Considerations for First-Time Sovereign Bond Issuers

By Magdalena Polan, Udaibir S Das, Michael G. Papaioannou

November 1, 2008

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Format: Chicago

Magdalena Polan, Udaibir S Das, and Michael G. Papaioannou Strategic Considerations for First-Time Sovereign Bond Issuers, (USA: International Monetary Fund, 2008) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The recent round of debt relief has restored debt sustainability in many low-income countries (LICs). This, along with a continued search for yield and desire for portfolio diversification by investors, has increased the range of viable financing options, including international bonds, for many emerging market (EM) economies and LICs. This paper presents some of the advantages and disadvantages of international debut bonds, within a debt sustainability framework. It outlines key preconditions and discusses strategic considerations that countries need to take into account when contemplating bond issuance in international markets for the first time. In this context, the paper also discusses some typical pitfalls in accessing international capital markets, including excessive issue size relative to the intended use of bond proceeds, issuance of bullet bonds, and inadequate preparation for accessing the markets.

Subject: Bonds, Government debt management, International bonds, International capital markets, Sovereign bonds

Keywords: Debut issue, Investor, Issuer, Market support, Proceeds, WP

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/261
Stock No:

WPIEA2008261
ISBN:

9781451871197
ISSN:

1018-5941

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