International Sovereign Bonds by Emerging Markets and Developing Economies: Drivers of Issuance and Spreads

By Andrea F Presbitero, Dhaneshwar Ghura, Olumuyiwa S Adedeji, Lamin Njie

December 24, 2015

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Andrea F Presbitero, Dhaneshwar Ghura, Olumuyiwa S Adedeji, and Lamin Njie. International Sovereign Bonds by Emerging Markets and Developing Economies: Drivers of Issuance and Spreads, (USA: International Monetary Fund, 2015) accessed November 23, 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

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.

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

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/275
Stock No:

WPIEA2015275
ISBN:

9781513581729
ISSN:

1018-5941

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