The Pricing of Bonds and Bank Loans in International Markets:  an Empirical Analysis of Developing Countries' Foreign Borrowing

Edwards, Sebastian

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The Pricing of Bonds and Bank Loans in International Markets: an Empirical Analysis of Developing Countries' Foreign Borrowing

NBER Working Paper No. w1689

42 Pages Posted: 16 Jul 2004 Last revised: 13 Feb 2022

See all articles by Sebastian Edwards

Sebastian Edwards

University of California, Los Angeles (UCLA) - Global Economics and Management (GEM) Area; National Bureau of Economic Research (NBER)

Date Written: August 1985

Abstract

The purpose of this paper is to compare the pricing of bank loans and bonds in international markets. The results obtained, using data on LDC debtors, indicate that in both markets the country risk premium has responded to some of the variables suggested by the theory. However, the way in which these variables affect the risk premium differs across these markets. Data on LDC bond yields in the secondary market for 1980-85 are also used to analyze the way in which this market reacted and anticipated the debt crisis.

Suggested Citation: Suggested Citation

Edwards, Sebastian, The Pricing of Bonds and Bank Loans in International Markets: an Empirical Analysis of Developing Countries' Foreign Borrowing (August 1985). NBER Working Paper No. w1689, Available at SSRN: https://ssrn.com/abstract=338768