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Brazilian Corporate Debt Issuance: Should You Invest in Local or International Bonds?

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  • Fernandes, Marcelo
  • Nunes, Ricardo

Abstract

The goal of this study is to analyze the yield difference between corporate debt issuance of Brazilian companies in local and foreign markets. From the perspective of the investor, we attempt to answer whether it is better, on average, to acquire a local debenture or an international bond from the same issuer after controlling for risk. To this end, we examine 177 local and 119 international bond issuances of 31 Brazilian non-financial companies from January 2004 to April 2013. Panel regressions with fixed effects to control for the issuer’s characteristics show that, on average, international bonds yield 164 to 197 bps more than local debentures, and that this difference is statistically significant.

Suggested Citation

  • Fernandes, Marcelo & Nunes, Ricardo, 2014. "Brazilian Corporate Debt Issuance: Should You Invest in Local or International Bonds?," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 34(2), November.
    • Handle: RePEc:sbe:breart:v:34:y:2014:i:2:a:17511
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    Cited by:

    1. Renu Kohli & Pravakar Sahoo & M. Shuheb Khan, 2017. "Developing India's Offshore Local Currency Bond Market: Lessons from Emerging Countries," Working Papers id:12039, eSocialSciences.

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