Role of Institutional Investors - Evidence from the Foreign “Rule 144A” Debt Market
51 Pages Posted: 13 Dec 2015 Last revised: 4 Nov 2019
Date Written: October 28, 2019
In this paper, we examine the unique role played by institutional investors in the private corporate debt market for Rule 144A debt. We use the Global financial crisis as a quasi-natural experiment to study how qualified institutional buyers (or QIBs) facilitated funding to the foreign debt issuers in U.S. Using an exhaustive sample of foreign bond issuances in the U.S. from over 65 countries between 1990 and 2013, we examine (a) corporate decisions involving debt choice and market timing, and (b) determination of offer spreads. Our findings collectively support the notion that QIBs enabled funding in the foreign 144A debt market despite the financial crisis.
Keywords: Foreign 144A issues, Yankee bonds, QIBs, financial crisis
JEL Classification: G10, G14 G15, G30
Suggested Citation: Suggested Citation