How Firms Borrow in International Bond Markets: Securities Regulation and Market Segmentation

64 Pages Posted: 3 Feb 2016

See all articles by Alberto Fuertes

Alberto Fuertes

Banco de España

José María Serena

Bank for International Settlements (BIS)

Date Written: February 1, 2016


We investigate how firms in emerging economies choose among the different international bond markets: global, US144A and Eurobond markets. By exploiting the connection between the market of issuance and regulatory disclosure of information, we show that firms with poorer credit quality, less ability to absorb flotation costs and more informational asymmetries issue debt in US144A and Eurobond markets, where regulation is lighter and information is less public. On the contrary, firms issuing global bonds – subject to full SEC requirements – are financially sounder and larger. This exercise also shows that, following the global crisis, firms are more likely to tap less regulated debt markets. The results are supported by descriptive evidence, univariate non-parametric analyses, and conditional and multinomial logit analyses. To research the issue, we have constructed a novel data set containing information on firms’ debt securities issuance and their financial accounts for the period 2000-2014. To account for firms' complex structures, we look at the balance sheet of the guarantor of debt, which need not be the issuing company. The data set comprises 3,944 debt securities, guaranteed by firms of 36 emerging economies, which amount to a total of 1.2 USD trillion in debt issued.

Keywords: bond markets, securities regulation, debt choice, Rule 144, Eurobond, Global bond

JEL Classification: G15, G18, G32

Suggested Citation

Fuertes, Alberto and Serena, Jose Maria, How Firms Borrow in International Bond Markets: Securities Regulation and Market Segmentation (February 1, 2016). Banco de Espana Working Paper No. 1603, Available at SSRN: or

Alberto Fuertes (Contact Author)

Banco de España ( email )

Alcala 50
Madrid 28014

Jose Maria Serena

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002

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