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The international financial markets as a source of funding for Greek non-financial corporations

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  • Petros Migiakis

    (Bank of Greece)

Abstract

Following the Global Financial Crisis, bank lending to euro-area non-financial corporations (NFCs) has been, to a large extent, substituted by market financing. In Greece the market financing channel for NFCs has been activated since the end of 2012; by the end of 2014 bonds issued by large and resilient Greek NFCs, in international markets, amounted to more than 6 billion euros. An index is constructed, for the purposes of monitoring the developments in the market for Greek corporate bonds; the methodology of constructing the index is presented in the present article (name: Bank of Greece “GR NFC bond index”, Bloomberg ticker: BOGGRNFC). With the use of the index, I examine the drivers of the Greek corporate bond yields, by means of cointegration analysis with structural breaks. The findings indicate that up until October 2014 Greek corporate bonds were significantly affected by factors affecting corporate bonds belonging to the investment grade, from other euro-area countries. However, this cointegration relationship is found to be subject to structural changes associated to changes in investor confidence towards the Greek economy.

Suggested Citation

  • Petros Migiakis, 2014. "The international financial markets as a source of funding for Greek non-financial corporations," Economic Bulletin, Bank of Greece, issue 40, pages 59-78, December.
  • Handle: RePEc:bog:econbl:y:2014:i:40:p:59-78
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    References listed on IDEAS

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    More about this item

    Keywords

    Corporate bonds; non-financial corporations; market financing; bond index; Greek debt crisis;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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