International Sovereign Bonds by Emerging Markets and Developing Economies: Drivers of Issuance and Spreads

28 Pages Posted: 17 Feb 2016

See all articles by Andrea Filippo Presbitero

Andrea Filippo Presbitero

Università Politecnica delle Marche - Department of Economics; Centre for Macroeconomics & Finance Research (CeMaFiR)

Dhaneshwar Ghura

International Monetary Fund (IMF)

Olumuyiwa Adedeji

International Monetary Fund (IMF)

Lamin Njie

International Monetary Fund (IMF)

Date Written: December 2015

Abstract

What determines the ability of low-income developing countries to issue bonds in international capital and what explains the spreads on these bonds? This paper examines these questions using a dataset that includes emerging markets and developing economies (EMDEs) that issued sovereign bonds at least once during the period 1995-2013 as well as those that did not. We find that an EMDE is more likely to issue a bond when, in comparison with non-issuing peers, it is larger in economic size, has higher per capita GDP, and has stronger macroeconomic fundamentals and government. Spreads on sovereign bonds are lower for countries with strong external and fiscal positions, as well as robust economic growth and government effectiveness. With regard to global factors, the results show that sovereign bond spreads are reduced in periods of lower market volatility.

Keywords: Sovereign bond issuance, bond spreads, developing countries, bonds, sovereign bonds, bond, markets, sovereign bond, International Lending and Debt Problems, Asset Pricing, Macroeconomic Analyses of Economic Development, All Countries,

JEL Classification: F34, G12, G15, O11

Suggested Citation

Presbitero, Andrea Filippo and Ghura, Dhaneshwar and Adedeji, Olumuyiwa and Njie, Lamin, International Sovereign Bonds by Emerging Markets and Developing Economies: Drivers of Issuance and Spreads (December 2015). IMF Working Paper No. 15/275. Available at SSRN: https://ssrn.com/abstract=2733580

Andrea Filippo Presbitero (Contact Author)

Università Politecnica delle Marche - Department of Economics ( email )

Piazzale Martelli, 8
Ancona, AN 60121
Italy
+39 0712207074 (Phone)

HOME PAGE: http://sites.google.com/site/presbitero/

Centre for Macroeconomics & Finance Research (CeMaFiR) ( email )

Piazza Mirabello, 2
Milan, 20100
Italy

Dhaneshwar Ghura

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Olumuyiwa Adedeji

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Lamin Njie

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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