Arbeitspapier
Foreign-law bonds: Can they reduce sovereign borrowing costs?
Governments often issue bonds in foreign jurisdictions, which can provide additional legal protection vis-à-vis domestic bonds. This paper studies the effect of this jurisdiction choice on bond prices. We test whether foreign-law bonds trade at a premium compared to domestic-law bonds. We use the euro area 2006-2013 as a unique testing ground, controlling for currency risk, liquidity risk, and term structure. Foreign-law bonds indeed carry significantly lower yields in distress periods, and this effect rises as the risk of a sovereign default increases. These results indicate that, in times of crisis, governments can borrow at lower rates under foreign law.
- Sprache
-
Englisch
- Erschienen in
-
Series: Kiel Working Paper ; No. 2109
- Klassifikation
-
Wirtschaft
International Lending and Debt Problems
Asset Pricing; Trading Volume; Bond Interest Rates
Business and Securities Law
- Thema
-
Sovereign Debt
Creditor Rights
Seniority
Law and Finance
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Chamon, Marcos
Schumacher, Julian
Trebesch, Christoph
- Ereignis
-
Veröffentlichung
- (wer)
-
Kiel Institute for the World Economy (IfW)
- (wo)
-
Kiel
- (wann)
-
2018
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Chamon, Marcos
- Schumacher, Julian
- Trebesch, Christoph
- Kiel Institute for the World Economy (IfW)
Entstanden
- 2018
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