Global Corporate Debt during Crises : Implications of Switching Borrowing across Markets

This paper studies how crises prompted firms to switch borrowing across markets, impacting the amount borrowed, maturity, and currency denomination at the firm and aggregate levels. Using data on worldwide debt issuance from advanced and emerging e...

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Main Authors:	Cortina, Juan J., Didier, Tatiana, Schmukler, Sergio L.
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2020
Subjects:	CORPORATE DEBT EMERGING MARKET ECONOMIES DEBT MARKETS CORPORATE BONDS CORPORATE FINANCE SOVEREIGN DEBT BANKING CRISIS DEBT MATURITY GLOBAL FINANCIAL CRISIS BOND ISSUES SYNDICATED LOANS
Online Access:	http://documents.worldbank.org/curated/en/105021580999161805/Global-Corporate-Debt-during-Crises-Implications-of-Switching-Borrowing-across-Markets http://hdl.handle.net/10986/33318

id	okr-10986-33318
recordtype	oai_dc
spelling	okr-10986-333182022-09-20T00:13:32Z Global Corporate Debt during Crises : Implications of Switching Borrowing across Markets Cortina, Juan J. Didier, Tatiana Schmukler, Sergio L. CORPORATE DEBT EMERGING MARKET ECONOMIES DEBT MARKETS CORPORATE BONDS CORPORATE FINANCE SOVEREIGN DEBT BANKING CRISIS DEBT MATURITY GLOBAL FINANCIAL CRISIS BOND ISSUES SYNDICATED LOANS This paper studies how crises prompted firms to switch borrowing across markets, impacting the amount borrowed, maturity, and currency denomination at the firm and aggregate levels. Using data on worldwide debt issuance from advanced and emerging economies, the paper shows that firms shifted their issuances between domestic and international syndicated loans and corporate bonds during financial crises. Firms reduced their borrowing in shock-hit markets but increased it in other debt markets. Firms also moved toward longer-term markets, maintaining (or even increasing) their borrowing maturity. As they moved toward domestic markets during international crises, firms reduced the share of foreign currency debt. The opposite occurred during domestic crises. Large firms were the ones that switched between international and domestic markets, affecting aggregate capital raising activity. The analysis of four distinct markets generates patterns consistent with credit supply shocks that are different from those obtained when studying the dynamics of individual markets. 2020-02-13T16:31:35Z 2020-02-13T16:31:35Z 2020-02 Working Paper http://documents.worldbank.org/curated/en/105021580999161805/Global-Corporate-Debt-during-Crises-Implications-of-Switching-Borrowing-across-Markets http://hdl.handle.net/10986/33318 English Policy Research Working Paper;No. 9142 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
topic	CORPORATE DEBT EMERGING MARKET ECONOMIES DEBT MARKETS CORPORATE BONDS CORPORATE FINANCE SOVEREIGN DEBT BANKING CRISIS DEBT MATURITY GLOBAL FINANCIAL CRISIS BOND ISSUES SYNDICATED LOANS
spellingShingle	CORPORATE DEBT EMERGING MARKET ECONOMIES DEBT MARKETS CORPORATE BONDS CORPORATE FINANCE SOVEREIGN DEBT BANKING CRISIS DEBT MATURITY GLOBAL FINANCIAL CRISIS BOND ISSUES SYNDICATED LOANS Cortina, Juan J. Didier, Tatiana Schmukler, Sergio L. Global Corporate Debt during Crises : Implications of Switching Borrowing across Markets
relation	Policy Research Working Paper;No. 9142
description	This paper studies how crises prompted firms to switch borrowing across markets, impacting the amount borrowed, maturity, and currency denomination at the firm and aggregate levels. Using data on worldwide debt issuance from advanced and emerging economies, the paper shows that firms shifted their issuances between domestic and international syndicated loans and corporate bonds during financial crises. Firms reduced their borrowing in shock-hit markets but increased it in other debt markets. Firms also moved toward longer-term markets, maintaining (or even increasing) their borrowing maturity. As they moved toward domestic markets during international crises, firms reduced the share of foreign currency debt. The opposite occurred during domestic crises. Large firms were the ones that switched between international and domestic markets, affecting aggregate capital raising activity. The analysis of four distinct markets generates patterns consistent with credit supply shocks that are different from those obtained when studying the dynamics of individual markets.
format	Working Paper
author	Cortina, Juan J. Didier, Tatiana Schmukler, Sergio L.
author_facet	Cortina, Juan J. Didier, Tatiana Schmukler, Sergio L.
author_sort	Cortina, Juan J.
title	Global Corporate Debt during Crises : Implications of Switching Borrowing across Markets
title_short	Global Corporate Debt during Crises : Implications of Switching Borrowing across Markets
title_full	Global Corporate Debt during Crises : Implications of Switching Borrowing across Markets
title_fullStr	Global Corporate Debt during Crises : Implications of Switching Borrowing across Markets
title_full_unstemmed	Global Corporate Debt during Crises : Implications of Switching Borrowing across Markets
title_sort	global corporate debt during crises : implications of switching borrowing across markets
publisher	World Bank, Washington, DC
publishDate	2020
url	http://documents.worldbank.org/curated/en/105021580999161805/Global-Corporate-Debt-during-Crises-Implications-of-Switching-Borrowing-across-Markets http://hdl.handle.net/10986/33318
_version_	1764478475252531200

Global Corporate Debt during Crises : Implications of Switching Borrowing across Markets

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