Developments in Corporate Bond Spreads at Issuance

Kaori Ochi and Mitsuhiro Osada
Additional contact information
Kaori Ochi: Bank of Japan
Mitsuhiro Osada: Bank of Japan

No 23-E-8, Bank of Japan Review Series from Bank of Japan

Abstract: Firms' financing environment in terms of commercial paper, corporate bond, and bank lending is one of the spillover channels of monetary policy. In particular, this article overviews the recent developments in corporate bond spreads in the primary markets, focusing mainly on the period from mid-2022 to early 2023 when we witnessed the spread widening. A quantitative time-series analysis using issue-by-issue data suggests that the widening of corporate bond spreads was caused by (1) increased demand for working capital in response to rising commodity prices and (2) spillover effects of tightening foreign financial conditions, reflecting monetary policy tightening by foreign central banks, and was likely affected by (3) a decline in the degree of functionality of the Japanese government bond (JGB) market.

JEL-codes: E44 E58 G12 (search for similar items in EconPapers)
Date: 2023-11-14
New Economics Papers: this item is included in nep-cba and nep-ifn
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.boj.or.jp/en/research/wps_rev/rev_2023/data/rev23e08.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:boj:bojrev:rev23e08

Access Statistics for this paper

More papers in Bank of Japan Review Series from Bank of Japan Contact information at EDIRC.
Bibliographic data for series maintained by Bank of Japan ().