International Sovereign Bonds by Emerging Markets and Developing Economies: Drivers of Issuance and Spreads
IMF Working Papers, December 24, 2015
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- International Sovereign Bonds by Emerging Markets and Developing Economies: Drivers of Issuance and Spreads
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Bibliographic details
- Authors: Andrea F Presbitero, Dhaneshwar Ghura, Olumuyiwa S Adedeji, Lamin Njie
- Published: December 24, 2015
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513581729.001
Research question and scope
- Investigates what determines the ability of low-income developing countries to issue bonds in international capital markets and what explains spreads on these bonds.
- Uses a dataset that includes emerging markets and developing economies (EMDEs) that issued sovereign bonds at least once during the period 1995-2013 as well as those that did not.
Key findings on issuance likelihood
- An EMDE is more likely to issue a bond when, in comparison with non-issuing peers:
- it is larger in economic size;
- it has higher per capita GDP;
- it has stronger macroeconomic fundamentals and government.
Key findings on spreads (cost of borrowing)
- Spreads on sovereign bonds are lower for countries with:
- strong external positions;
- strong fiscal positions;
- robust economic growth;
- government effectiveness.
- Global factor: sovereign bond spreads are reduced in periods of lower market volatility.
Subject areas and keywords
- Subject: Financial institutions, Financial markets, Financial services, Fiscal policy, Fiscal stance, International bonds, International capital markets, Sovereign bonds, Yield curve
- Keywords: bond spreads, developing countries, Fiscal stance, Global, International bonds, International capital markets, issuer, market access, market volatility, occasional issuers, sovereign bond bond issue, sovereign bond bond market, Sovereign bond issuance, Sovereign bonds, spread, WP, yield, Yield curve