Assessing the Cost Effectiveness of Index-linked Bond Issuance: A Methodological Approach, Illustrated Using UK Examples
AbstractSovereign index-linked bond issuance has grown significantly since the early 1980s, with nearly $2.5 trillion USD in bonds now in issue. Index-linked bonds have become a widely accepted part of the set of instruments that sovereign debt managers use for funding purposes and so the question of how to assess their cost effectiveness relative to other financing options is of increasing importance. This paper sets out a methodology for conducting such an analysis, the rationale behind it and ways in which such an approach could be further developed.
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Bibliographic InfoPaper provided by OECD Publishing in its series OECD Working Papers on Sovereign Borrowing and Public Debt Management with number 7.
Date of creation: 01 Aug 2013
Date of revision:
government bonds; financial risk management; risk hedging; treasury securities; risk return;
Find related papers by JEL classification:
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-28 (All new papers)
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