Sovereign bond issues: Do African countries pay more to borrow?

Michael Olabisi () and Howard Stein ()
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Michael Olabisi: Graziadio School of Business
Howard Stein: University of Michigan

Journal of African Trade, 2015, vol. 2, issue 1, 87-109

Abstract: Abstract There is a new wave of external borrowing by African governments on private sovereign bond markets. The findings in this paper indicate that African economies pay higher-than-normal coupon rates on these markets; observed risk measures like agency ratings and debt to GDP ratios do not explain the deviation from the norm. We also find that countries in better financial standing tend to self-select into the private markets, such that their risk profiles cannot explain the high coupon rates. Further research steps and policy implications are discussed.

Keywords: Sub-Saharan Africa; Sovereign debt markets; Development finance (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1016/j.joat.2015.08.003

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