Hybrid Issuance Regimes for Corporate Bonds in Emerging Market Countries : Analysis, Impact and Policy Choices
Securities regulators in many developing countries are looking for ways to help grow their nongovernment bond markets to finance development. A common challenge is onerous regulations for issuance of bonds, which tend to discourage companies from c...
| Main Author: | |
|---|---|
| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/06/24738083/hybrid-issuance-regimes-corporate-bonds-emerging-market-countries-analysis-impact-policy-choices http://hdl.handle.net/10986/22232 |
| id |
okr-10986-22232 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-222322021-04-23T14:04:07Z Hybrid Issuance Regimes for Corporate Bonds in Emerging Market Countries : Analysis, Impact and Policy Choices Loladze, Tamar ANTIFRAUD PROTECTIONS BOND ISSUANCE BOND MARKET CORPORATE BONDS EMERGING MARKETS HIGH NET WORTH HYBRID OFFER REGIMES ISSUANCE TRENDS Securities regulators in many developing countries are looking for ways to help grow their nongovernment bond markets to finance development. A common challenge is onerous regulations for issuance of bonds, which tend to discourage companies from coming to market. This paper explains and analyzes an issuance framework—a hybrid offer regime (HBOR)—that is particularly suitable for bonds and could help encourage greater issuance and market growth. The HBOR reduces issuance requirements and approval times for bond issuers but maintains certain protections to ensure investor comfort. While certain aspects of this type of issuance have been covered in literature on private placements, the review of hybrid offer regimes, as discussed in this paper, is new and has been evaluated by the WBG. Drawing on the experience of eight countries, the paper identifies key features of HBORs and highlights important issues for policymakers to consider in their implementation. The findings conclude that the most salient features of HBORs are: i) investment limited to qualified investors, usually institutional and/or high net worth; ii) reduced initial and ongoing disclosures, including exemption from a full prospectus; iii) limited role of the regulator, if any, in the approval process; iv) unrestricted access to secondary market trading for eligible investors; and v) continued provision of antifraud protections against false/misleading statements in disclosures. The paper also looks at issuance trends in three countries and finds that the HBOR may have had a positive impact on encouraging new, less established issuers to come to the bond market. 2015-07-20T14:42:18Z 2015-07-20T14:42:18Z 2015-06 Working Paper http://documents.worldbank.org/curated/en/2015/06/24738083/hybrid-issuance-regimes-corporate-bonds-emerging-market-countries-analysis-impact-policy-choices http://hdl.handle.net/10986/22232 English en_US Policy Research Working Paper;No. 7351 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ANTIFRAUD PROTECTIONS BOND ISSUANCE BOND MARKET CORPORATE BONDS EMERGING MARKETS HIGH NET WORTH HYBRID OFFER REGIMES ISSUANCE TRENDS |
| spellingShingle |
ANTIFRAUD PROTECTIONS BOND ISSUANCE BOND MARKET CORPORATE BONDS EMERGING MARKETS HIGH NET WORTH HYBRID OFFER REGIMES ISSUANCE TRENDS Loladze, Tamar Hybrid Issuance Regimes for Corporate Bonds in Emerging Market Countries : Analysis, Impact and Policy Choices |
| relation |
Policy Research Working Paper;No. 7351 |
| description |
Securities regulators in many developing
countries are looking for ways to help grow their
nongovernment bond markets to finance development. A common
challenge is onerous regulations for issuance of bonds,
which tend to discourage companies from coming to market.
This paper explains and analyzes an issuance framework—a
hybrid offer regime (HBOR)—that is particularly suitable for
bonds and could help encourage greater issuance and market
growth. The HBOR reduces issuance requirements and approval
times for bond issuers but maintains certain protections to
ensure investor comfort. While certain aspects of this type
of issuance have been covered in literature on private
placements, the review of hybrid offer regimes, as discussed
in this paper, is new and has been evaluated by the WBG.
Drawing on the experience of eight countries, the paper
identifies key features of HBORs and highlights important
issues for policymakers to consider in their implementation.
The findings conclude that the most salient features of
HBORs are: i) investment limited to qualified investors,
usually institutional and/or high net worth; ii) reduced
initial and ongoing disclosures, including exemption from a
full prospectus; iii) limited role of the regulator, if any,
in the approval process; iv) unrestricted access to
secondary market trading for eligible investors; and v)
continued provision of antifraud protections against
false/misleading statements in disclosures. The paper also
looks at issuance trends in three countries and finds that
the HBOR may have had a positive impact on encouraging new,
less established issuers to come to the bond market. |
| format |
Working Paper |
| author |
Loladze, Tamar |
| author_facet |
Loladze, Tamar |
| author_sort |
Loladze, Tamar |
| title |
Hybrid Issuance Regimes for Corporate Bonds in Emerging Market Countries : Analysis, Impact and Policy Choices |
| title_short |
Hybrid Issuance Regimes for Corporate Bonds in Emerging Market Countries : Analysis, Impact and Policy Choices |
| title_full |
Hybrid Issuance Regimes for Corporate Bonds in Emerging Market Countries : Analysis, Impact and Policy Choices |
| title_fullStr |
Hybrid Issuance Regimes for Corporate Bonds in Emerging Market Countries : Analysis, Impact and Policy Choices |
| title_full_unstemmed |
Hybrid Issuance Regimes for Corporate Bonds in Emerging Market Countries : Analysis, Impact and Policy Choices |
| title_sort |
hybrid issuance regimes for corporate bonds in emerging market countries : analysis, impact and policy choices |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2015/06/24738083/hybrid-issuance-regimes-corporate-bonds-emerging-market-countries-analysis-impact-policy-choices http://hdl.handle.net/10986/22232 |
| _version_ |
1764450491095318528 |