Arbeitspapier

Foreign-currency bonds: currency choice and the role of uncovered and covered interest parity

Using count-data techniques, this paper studies the determinants of currency choice in the issuance of foreign-currency-denominated bonds. In particular, we investigate whether bond issuers choose their issuance currency in order to exploit the borrowing-cost savings associated with deviations from uncovered and covered interest parity. Our sample includes issuers from both the public sector and private sector. Our findings show that the choice of issuance currency is sensitive to deviations from uncovered interest parity but insensitive, in general, to deviations from covered interest parity. Furthermore, the influence of deviations from uncovered interest parity is stronger for financial issuers than for nonfinancial issuers.

Sprache
Englisch

Erschienen in
Series: ECB Working Paper ; No. 947

Klassifikation
Wirtschaft
Foreign Exchange
Financial Aspects of Economic Integration
Information and Market Efficiency; Event Studies; Insider Trading
International Financial Markets
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
Thema
bonds
currency choice
foreign exchange
interest-rate parity
international debt securities
Internationale Anleihe
Währungsmanagement
Zinsparität
Internationaler Finanzmarkt
Theorie
Welt

Ereignis
Geistige Schöpfung
(wer)
Habib, Maurizio Michael
Joy, Mark
Ereignis
Veröffentlichung
(wer)
European Central Bank (ECB)
(wo)
Frankfurt a. M.
(wann)
2008

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Habib, Maurizio Michael
  • Joy, Mark
  • European Central Bank (ECB)

Entstanden

  • 2008

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