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International Sovereign Bonds by Emerging Markets and Developing Economies: Drivers of Issuance and Spreads
Author:
Mr. Andrea F Presbitero
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https://orcid.org/0000-0003-4622-941X
,
Mr. Dhaneshwar Ghura
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,
Mr. Olumuyiwa S Adedeji
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, and
Lamin Njie
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Series:
IMF Working Papers
Volume/Issue:
Volume 2015: Issue 275
Language:
English
Publication Date:
24 Dec 2015
DOI:
https://doi.org/10.5089/9781513581729.001
ISBN:
9781513581729
ISSN:
1018-5941
Pages:
27
Keywords:
WP; issuer; spread; yield; Sovereign bond issuance; bond spreads; developing countries; sovereign bond bond issue; sovereign bond bond market; market access; occasional issuers; market volatility; Sovereign bonds; Fiscal stance; International bonds; Yield curve; International capital markets; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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What determines the ability of low-income developing countries to issue bonds in international capital and what explains the spreads on these bonds? This paper examines these questions using 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. We find that an EMDE is more likely to issue a bond when, in comparison with non-issuing peers, it is larger in economic size, has higher per capita GDP, and has stronger macroeconomic fundamentals and government. Spreads on sovereign bonds are lower for countries with strong external and fiscal positions, as well as robust economic growth and government effectiveness. With regard to global factors, the results show that sovereign bond spreads are reduced in periods of lower market volatility.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund