| Description |
1 online resource |
| Series |
IMF Working Papers, 1018-5941 ; Working Paper No. 15/10 |
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IMF Working Papers ; Working Paper no. 15/10
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| Contents |
Cover Page; Title Page; Copyright Page; Contents; Figures; I. Introduction; II. Data; III. Overview of NFCs Bond Issuance in LA-5 Economies; 1. Nonfinancial Corporates Bond; 2. Nonfinancial Corporates Bond Issuance; IV. Leverage and Debt Service Capacity; 3. Median Debt to Equity Ratio; 4. Weak Tail (25th Percentile) of Debt to Equity Ratio; 5. Net Debt to Earnings; 6. Interest Coverage Ratio; 7. Investment to Total Debt; 8. Cash To Gross Interest Expenses; V. Shifts in Liability Structures; 9. LA5: Corporate Term Loan Financing |
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10. LA5: Investment Grade Yield Curves for Nonfinancial Companies-Fixed-Rate Dollar Denominated BondsVI. Issuance Through Foreign Subsidiaries; VII. Conclusions; References; Annex; Footnotes |
| Summary |
Easy global liquidity conditions, stronger risk appetite and a retrenchment in cross-border bank lending led to a surge in emerging market firms' bond issuance in international markets (what we term "The Bon(d)anza"). Using firm-level data for five large Latin American economies, we provide evidence of a significant change in companies' external funding strategies and liability structures after 2010, as well as in the balance sheet risks that firms face. We find that stepped up bond issuance was mostly aimed at re-financing rather than funding investment projects, as firms extended the average duration of their debt while securing lower fixed-rates, reducing roll-over and interest rate risks. The shift towards safer maturity structures has come at the expense of a leveraging-up in foreign-currency-denominated financial debt in several countries- reversing a de-dollarization trend seen during the last decade. We also provide evidence that a substantial part of these bonds were issued through offshore vehicles, suggesting regulatory and tax arbitrage strategies. For some corporations, rising dollar debt and high leverage will be particularly taxing in an environment of US dollar strengthening, less buoyant commodity prices and slowing domestic activity |
| Notes |
Print version record |
| Subject |
Corporations -- Latin America -- Finance
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Corporate debt -- Latin America
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Bonds -- Latin America
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Capital market -- Latin America
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Financial risk -- Latin America
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Financial statements -- Latin America
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Bonds
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Capital market
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Corporate debt
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Corporations -- Finance
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Financial risk
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Financial statements
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Latin America
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| Form |
Electronic book
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| ISBN |
1336016388 |
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9781336016385 |
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1498307809 |
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9781498307802 |
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1498372791 |
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9781498372794 |
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