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

Anastasia Guscina, Guilherme Pedras and Gabriel Presciuttini

No 2014/127, IMF Working Papers from International Monetary Fund

Abstract: International bond issuance by debut issuers has risen in recent years. The uptick was a result of both demand and supply factors. The search for yield and demand for portfolio diversification have resulted in demand-driven easy financing conditions. At the same time, rising financing needs for many debut issuers, coupled with 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. As bonds issued in the international markets are typically denominated in hard currencies, have large volumes and a bullet structure, exposure to exchange rate and refinancing risk has increased. Therefore, risk-mitigating policy actions are needed to prepare for redemption, support debt sustainability, and secure adequate debt management capacity.

Keywords: WP; debut issuer; foreign currency; first-time issuer; exchange rate; debt relief; Bond market; public debt; market access; LICs; frontier markets; debt sustainability exercise; bond issuance; debt sustainability indicator; external shock; debt manager; Bonds; International bonds; Emerging and frontier financial markets; Currencies; Debt sustainability; Global; Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 40
Date: 2014-07-18
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Citations: View citations in EconPapers (8)

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