International Pricing of Emerging Market Corporate Debt : Does the Corporate Matter?

Author/Editor:

Sonja Keller ; Ashoka Mody

Publication Date:

January 1, 2010

Electronic Access:

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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:

We examine risk spreads charged on corporate bonds placed by emerging market borrowers on international exchanges. While global developments have an important effect on spreads, changes in firm-level default risk also matter significantly in a way consistent with theory and experience in mature markets. In contrast, except during periods of financial crisis, country factors play a limited role. These findings go against the supposition that limited information on emerging market firms or significant agency problems prevent firm-level credit discrimination by international investors. The firm-level information capitalization into spreads possibly reflects protection afforded by the exchange listing on international markets.

Series:

Working Paper No. 10/26

Subject:

English

Publication Date:

January 1, 2010

ISBN/ISSN:

9781451962475/1018-5941

Stock No:

WPIEA2010026

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

38

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