Feyen, ErikGhosh, SwatiKibuuka, KatieFarazi, Subika2015-08-172015-08-172015-07https://hdl.handle.net/10986/22448Using the universe of all externally issued bonds by corporates and sovereigns in emerging and developing economies during 2000-14, this paper analyzes various issuance trends, including the unprecedented post-crisis surge. The paper focuses on external issuance at the country-industry and individual bond levels and finds that global factors matter greatly for emerging and developing economies issuance. A decrease in U.S. expected equity market (or interest rate) volatility, U.S. corporate credit spreads, and U.S. interbank funding costs and an increase in the Federal Reserve’s balance sheet (i) raise the odds that the monthly issuance volume of a country-industry is above its historical average; (ii) decrease individual bond yields and spreads; and (iii) raise bond maturities, after controlling for country pull factors, bond characteristics (for example, type of issuer, industry, and riskiness). Additionally, we document support that the risk-taking channel of exchange rate appreciation also operates for external bond issuance. Moreover, while the paper finds that country pull factors affect the impact of global factors, it does not find consistent evidence for this across the board. This result suggests that, during loose global funding conditions, flows are mostly driven by push factors and do not systematically discriminate between emerging and developing economies. Taken together, the findings suggest that although issuers might be able to benefit from benign international funding conditions, the large issuance volumes, currency risks, and high exposure to global factors could pose external and domestic challenges for policy makers, particularly when global cycles reverse.en-USCC BY 3.0 IGORISK PROFILESCREDIT MARKETSMONETARY POLICYHOLDINGBORROWERCROSS-BORDER FLOWSACCOUNTINGLONG-TERM INTERESTREAL INTEREST RATESINTERESTPOST-CRISIS PERIODEMERGING MARKET BONDRATE OF RETURNREAL EXCHANGE RATESCREDIT SPREADOPTIONPRIVATE CREDITBOND SPREADSDOMESTIC MARKETDEVELOPING COUNTRIESTOTAL DEBTEXPORTERSPORTFOLIOSOVEREIGN ENTITIESCREDITWORTHINESSBORROWERSLIQUIDITY PREMIUMCURRENT ACCOUNT SURPLUSESEXTERNAL FINANCEBOND ISSUANCESFOREIGN INVESTORBACKED SECURITYCURRENCYINTERNATIONAL BOND MARKETSTRANCHESFOREIGN CURRENCIESEXCHANGE RATESBOND ISSUANCEMORTGAGE-BACKED SECURITYINTERNATIONAL BONDEMERGING MARKETFINANCIAL INSTITUTIONSDEBTMARKETSBOND ISSUEINTERNATIONAL DEBTINVESTMENT OPPORTUNITIESBORROWING COSTSBANK CREDITEQUITIESBANK POLICYCURRENT ACCOUNT DEFICITSMARKET ECONOMIESEMERGING MARKETSCURRENCY RISKSFEDERAL RESERVEBOND MARKETSBOND “SPREADSINTERNATIONAL FINANCIAL STATISTICSCOUNTRY RISKLONG-TERM INTEREST RATEDOMESTIC LIQUIDITYINTERNATIONAL DEBT SECURITIESFUTUREBOND “SPREADDEBT SECURITIESISSUANCEDEBT STOCKSREAL EXCHANGE RATELOCAL CURRENCYMONETARY POLICIESSECURITIESEXPORTERBOND MATURITYTREASURYCREDIT SPREADSCURRENCIESECONOMIC DEVELOPMENTTAX CODEGLOBAL TRADEOUTSTANDING STOCKSCOMMERCIAL BANKSCORPORATE BONDTREASURY BONDSFINANCIAL RISKSTREASURY YIELDSLENDINGRISKY ASSETSMATURITIESRISK AVERSIONLOCAL CURRENCIESFINANCIAL SYSTEMSPORTFOLIO FLOWSINTERNATIONAL BANKSBACKED SECURITIESGLOBAL FINANCIAL STABILITYDEPOSITMORTGAGE- BACKED SECURITIESBASIS POINTSLIABILITYOUTSTANDING STOCKOIL PRICEEQUITY FLOWSSTOCKBOND MATURITIESASSET PRICESEMERGING ECONOMIESINTEREST RATEEXCHANGEBANKING SYSTEMTREASURIESINTERNATIONAL BOND MARKETISSUANCESLIQUIDITYEQUITY MARKETGOVERNMENT BOND MARKETREAL INTERESTMORTGAGEDEFAULT RISKBONDSISSUANCE OF BONDSTAXGOVERNMENT BONDBOND YIELDSINVESTOR BASERESERVEFINANCIAL FRAGILITIESINTERNATIONAL BANKEMERGING MARKET ECONOMIESBANK LENDINGCENTRAL BANKMATURITYINTERNATIONAL FINANCEBOND FLOWSTREASURY YIELDBOND YIELDPRIMARY MARKETCONTRACTSBOND DEALINTEREST RATESOPTIONSIMPLIED VOLATILITYRETURNDEFICITSREAL INTEREST RATERESERVESLOCAL FINANCIAL MARKETSINFORMATION ON BORROWERSFINANCIAL SYSTEMFINANCEFOREIGN CURRENCYRISK PREMIUMSPUBLIC INVESTMENTBORROWING CAPACITYBOND DEALSEQUITYSECURITIES MARKETSINVESTORSRISK NEUTRALYIELD CURVESINTERNATIONAL BANKINGFINANCIAL STABILITYGOVERNMENT BOND MARKETSPRIVATE SECTOR CREDITTRANCHEFINANCIAL CRISISPOST-CRISIS PERIODSSECONDARY MARKETSRETURNSMORTGAGE-BACKED SECURITIESSHORT-TERM DEBTINVESTOR CONFIDENCELONG-TERM INTEREST RATESDEBT MATURITIESPUSH FACTORMATURITY EXTENSIONBOND MARKETYIELD CURVEEXPENDITURESCAPITAL FLOWSBALANCE SHEETDEFAULTHEDGESMARKETCREDIT RATINGMARKET DEBTPRODUCTIVE INVESTMENTSFOREIGN CURRENCY EXPOSURESCORPORATE DEBTGOODSINVESTORCORPORATE BONDSEQUITY INDEXSECURITYFINANCIAL DEVELOPMENTEQUITY MARKETSINTERNATIONAL MARKETSTOCKSINVESTMENTBONDSHAREBALANCE SHEETSCREDIT QUALITYFINANCIAL MARKETSASSET BACKED SECURITIESPUSH FACTORSFINANCIAL SHOCKSINDIVIDUAL BONDBOND PRICESCAPITAL INFLOWSMONEY MARKETEXTERNAL DEBTINVESTMENTSCREDIT GROWTHFINANCIAL RISKEXCHANGE RATEASSET CLASSDEBT SERVICINGINTERNATIONAL INVESTORSTREASURY RATEINTERNATIONAL SETTLEMENTSINCOME LEVELSWAPEXTERNAL BORROWINGWorking PaperWorld Bank10.1596/1813-9450-7363