Why Issue Bonds Offshore?

Black, Susan; Munro, Anella

doi:10.2139/ssrn.1725989

Cited by 18 publications

(17 citation statements)

References 26 publications

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“…Studies by Burger and Warnock (2004), Eichengreen and Luengnaruemitchai (2004), Braun and Briones (2006), and Bae 2012 We focus on the firm's capital structure and motivation theories that could explain the firm's decision regarding the jurisdiction of issuance. A comprehensive overview of those is found in Black and Munro (2010) and Mizen et al (2012). Studies by Rajan and Zingales (1995), Booth et al (2001), Gozzi et al (2012) find the size and strength of the firm's balance sheet being the determining factors in financing choice decisions (local or external), across both developed and developing countries.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Whereas, Myers and Majluf (1984) concluded that before issuing abroad the largest and strongest firms might first tap local savings akin to the pecking order theory. 13 Lower-rated/smaller firms may attempt to go abroad where risk taking is more prevalent and the pool of investors is more diverse (Black and Munro, 2010). 14 Some firms might also seek external markets for its completeness/depth, which relates to the capacity to absorb larger issuances and innovatively structured or tailored products available in a larger and more diversified investor pool.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Issuers in less developed markets may tap external markets to realize lower costs and other considerations, such as lengthening the tenor or locking in a rate (timing the market for yield). In more sophisticated and active markets, price arbitrage/static trade off considerations may drive decisions where deviations in cost incentives are actively arbitraged through variations in interest rates in different currencies and proceeds are frequently swapped back into local currency (Black and Munro 2010).…”

Section: Literature Reviewmentioning

confidence: 99%

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A License to Issue (Anywhere): Patterns and Drivers of Corporate Bonds in Latin America

Vtyurina

Robles²,

Sutton³

2017

IMF Working Papers

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This paper overviews patterns in bond issuance in local and external markets by firms in six large Latin American countries. Data suggest that despite rising issuance, local markets remain small and shallow in several countries. Nevertheless, since greater funding is available to many firms in both markets, we investigate the factors that may explain the firm's choice on where to issue a bond. Using an unbalanced panel of firm and market-level indicators for years 1995-2015, we control for variables representing several theories of capital structure, and the results show that firm characteristics such as size and liquidity increase the likelihood of firms to issue externally. With respect to market characteristics, the market completeness hypothesis generates the most support, where market scale and depth are most important for the issuer's choice of the market, suggesting that local markets will have to become deeper to draw more firms and investment.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

A License to Issue (Anywhere): Patterns and Drivers of Corporate Bonds in Latin America

Vtyurina

Robles²,

Sutton³

2017

IMF Working Papers

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“…En mercados más pequeños, como Hong Kong y Corea, se han analizado los motivos del desarrollo de las emisiones de eurobonos frente a las de bonos nacionales. Los resultados sugieren que las razones que subyacen en la elección de las empresas para endeudarse en los mercados financieros han sido los diferenciales de precios más baratos, el acceso de los inversores extranjeros y la posibilidad de emitir eurobonos más grandes, de más baja calificación y de mayor vencimiento (Black & Munro, 2010 …”

Section: Cuadro 4 Emisiones De Eurobonos En Yuanes Chinos (Cny)unclassified

Impacto de la crisis en el mercado de eurobonos: ‘rating’ y nuevos emisores asiáticos

Martínez

Selva

Medina

2015

hdbr

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ResumenLa crisis financiera ha supuesto importantes cambios en la situación financiera internacional. Concretamente, en el mercado de eurobonos, las consecuencias han sido determinantes sobre el comportamiento de los inversores y emisores. En este contexto de recesión, el artículo tiene como objetivo analizar su impacto sobre el mercado de eurobonos, tratando de esclarecer el papel que han desempeñado las agencias de rating en todo este entramado de riesgo. Además, se añade la posición cada vez más relevante de los países asiáticos, materializada en incrementos significativos de eurobonos emitidos en yuanes. Las entidades chinas, a la cabeza del relevo, están comenzando a reemplazar a las europeas y las estadounidenses. Palabras claveEurobonos, rating, crisis financiera, mercado financiero internacional. SummaryThe financial crisis has led to significant changes in the international financial situation. Specifically, in the Eurobond market were decisive consequences on the behavior of investors and issuers. In this recessionary environment, the paper aims to analyze its impact on the Eurobond market, trying to clarify the role played by rating agencies in this web of risk. Also, add the increasingly important position of Asian countries, materialized in significant increases Eurobonds issued in yuan. Chinese entities, at the head of the relay, are beginning to replace European and American.

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“…Potential motivations for issuing equities in international markets are to avoid illiquid domestic markets, taxes, regulations and the lack of sound accounting/auditing systems (see Gozzi et al (2012) for references). Potential motivations for issuing bonds offshore are risk management, price arbitrage, market completeness, barriers to nonresident investment onshore, and funding diversification(Black and Munro (2010)).…”

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confidence: 99%

Financial Intermediation, Markets, and Alternative Financial Sectors

Allen

Carletti

Qian

et al. 2013

Handbook of the Economics of Finance

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We provide a comprehensive review of firms' financing channels (internal and external, domestic and international) around the globe, with the focus on alternative finance-financing from all the nonmarket, non-bank external sources. We argue that while traditional financing channels, including financial markets and banks, provide significant sources of funds for firms in developed countries, alternative financing channels provide an equally important source of funds in both developed and developing countries. Alternative finance is often the dominant source of funds for firms in fastgrowing economies. We compare market-and bank-finance with alternative finance, along with the supporting mechanisms such as legal and institutional structures. Much more research is needed to better understand alternative finance and its role in corporate financing. We suggest ways to obtain firm-level data on various forms of alternative finance and thus overcome the main obstacle in the field.JEL Classifications: O5, K0, G2.

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Why Issue Bonds Offshore?

Cited by 18 publications

References 26 publications

A License to Issue (Anywhere): Patterns and Drivers of Corporate Bonds in Latin America

A License to Issue (Anywhere): Patterns and Drivers of Corporate Bonds in Latin America

Impacto de la crisis en el mercado de eurobonos: ‘rating’ y nuevos emisores asiáticos

Financial Intermediation, Markets, and Alternative Financial Sectors

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