Published in:Hong Kong Institute for Monetary and Financial Research (HKIMR) Research Paper WP ; No. 02/2023
Extent:
1 Online-Ressource (35 p)
Language:
English
DOI:
10.2139/ssrn.4342409
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 2023 erstellt
Description:
This working paper is written by Ip-Wing Yu (Hong Kong Monetary Authority) and Angela Sze (Hong Kong Monetary Authority).Offshore bond issues by non-financial corporations in Emerging Asia have increased considerably since the Global Financial Crisis and warrant close monitoring as they become a transmission channel of global financial conditions to these economies. Based on bond data and issuers’ financial characteristics from 2010 to 2021, this paper sheds light on this issue by providing three findings. First, balance sheet conditions of issuers are found to be weakened during the period, with highly leveraged issuers accounting for more than half of the offshore bonds issued by EM Asian corporates. Issuers’ profitability and interest repayment ability were also found to be weakened. Second, our empirical analysis finds that external factors including market volatility and global liquidity condition are drivers of offshore bond issuance other than firms’ financial conditions. Finally, the paper also finds that the proceeds raised by offshore bond issues were found to have increased on issuers’ holdings of short-term assets and marketable securities, suggesting more intermediaries activities by these firms