Corporate inflation-indexed bonds in emerging market countries: recent trends and prospects
Inflation-indexed bonds represent a sizeable source of financing for corporations in emerging market countries, while they provide significant portfolio benefits to investors. In particular, inflation-indexed bonds can reduce borrowing costs and facilitate a maturity extension for a corporate issuer, while they can offer protection against inflation and thus guarantee stable real returns for investors. Despite these benefits, the issuance of inflation-indexed securities by corporations in emerging market countries has declined in recent years. This trend reflects primarily a decline in inflation in emerging market economies, but also other structural factors, including a relative illiquidity in corporate debt markets and an absence of government benchmark issues for inflation-indexed securities. This paper argues that even in an environment of declining inflation, the issuance of inflation-linked bonds maintains significant benefits both for issuers, such as possible lowering of funding costs, the ability to match debt payments with inflation- linked revenue streams, and the potential to increase the debt maturity, and for investors, such as portfolio diversification gains.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 20 (2007)
Issue (Month): ()
|Contact details of provider:|| Postal: |
Phone: +1 212 284 8600
Web page: http://www.capco.com/Email:
When requesting a correction, please mention this item's handle: RePEc:ris:jofitr:0925. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Springett)
If references are entirely missing, you can add them using this form.