## First-Time International Bond Issuance—New Opportunities and Emerging Risks

_IMF Working Papers, July 18, 2014_

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**Canonical URL:** [First-Time International Bond Issuance—New Opportunities and Emerging Risks](https://www.imf.org/en/publications/wp/issues/2016/12/31/first-time-international-bond-issuance-new-opportunities-and-emerging-risks-41762)

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## Bibliographic details
- Authors: Anastasia Guscina, Guilherme Pedras, Gabriel Presciuttini
- Published: July 18, 2014
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498390699.001

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### Summary
- International bond issuance by debut issuers has risen in recent years.
- The uptick was a result of both demand and supply factors.
- Demand-side factors: the search for yield and demand for portfolio diversification have resulted in demand-driven easy financing conditions.
- Supply-side factors: rising financing needs for many debut issuers, reduced access to concessional financing, relatively undeveloped domestic markets, and a favorable interest rate environment have made international bonds an attractive financing alternative for many countries.
- Typical features of these international bonds: denominated in hard currencies, large volumes, and a bullet structure.
- Increased exposures: exchange rate risk and refinancing risk have increased for debut issuers.
- Implication: risk-mitigating policy actions are needed to prepare for redemption, support debt sustainability, and secure adequate debt management capacity.

### Key Findings
- Debut international bond issuance has increased, driven by:
  - Search for yield and portfolio diversification on the investor side.
  - Rising financing needs, reduced concessional financing, undeveloped domestic markets, and favorable interest rates on the issuer side.
- Characteristics of issuance that affect risk:
  - Denomination in hard currencies.
  - Large issuance volumes.
  - Bullet repayment structures.
- Resulting elevated risks:
  - Exchange rate risk.
  - Refinancing risk.

### Policy Recommendations and Implications
- Implement risk-mitigating policy actions to:
  - Prepare for redemption events.
  - Support debt sustainability.
  - Secure adequate debt management capacity.

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/first-time-international-bond-issuance-new-opportunities-and-emerging-risks-41762_