International Pricing of Emerging Market Corporate Debt

Download or read book International Pricing of Emerging Market Corporate Debt written by Ms.Sonja Keller and published by International Monetary Fund. This book was released on 2010-01-01 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine risk spreads charged on corporate bonds placed by emerging market borrowers on international exchanges. While global developments have an important effect on spreads, changes in firm-level default risk also matter significantly in a way consistent with theory and experience in mature markets. In contrast, except during periods of financial crisis, country factors play a limited role. These findings go against the supposition that limited information on emerging market firms or significant agency problems prevent firm-level credit discrimination by international investors. The firm-level information capitalization into spreads possibly reflects protection afforded by the exchange listing on international markets.