Strategic Considerations for First-Time Sovereign Bond Issuers

29 Pages Posted: 18 Dec 2008

See all articles by Udaibir Das

Udaibir Das

International Monetary Fund (IMF)

Michael G. Papaioannou

International Monetary Fund (IMF)

Magdalena Polan

International Monetary Fund (IMF)

Date Written: November 2008

Abstract

The recent round of debt relief has restored debt sustainability in many low-income countries (LICs). This, along with a continued search for yield and desire for portfolio diversification by investors, has increased the range of viable financing options, including international bonds, for many emerging market (EM) economies and LICs. This paper presents some of the advantages and disadvantages of international debut bonds, within a debt sustainability framework. It outlines key preconditions and discusses strategic considerations that countries need to take into account when contemplating bond issuance in international markets for the first time. In this context, the paper also discusses some typical pitfalls in accessing international capital markets, including excessive issue size relative to the intended use of bond proceeds, issuance of bullet bonds, and inadequate preparation for accessing the markets.

Keywords: International bond markets, Sovereign debt, Debt relief, Debt sustainability, Low-income developing countries, Emerging markets, International capital markets

Suggested Citation

Das, Udaibir and Papaioannou, Michael G. and Polan, Magdalena, Strategic Considerations for First-Time Sovereign Bond Issuers (November 2008). IMF Working Paper No. 08/261, Available at SSRN: https://ssrn.com/abstract=1316729

Udaibir Das

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Michael G. Papaioannou

International Monetary Fund (IMF) ( email )

700 19th Street NW
10-115
Washington, DC 20431
United States
001-202-623-7799 (Phone)
001-202-623-7018 (Fax)

Magdalena Polan

International Monetary Fund (IMF) ( email )

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

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