- مبلغ: ۸۶,۰۰۰ تومان
- مبلغ: ۹۱,۰۰۰ تومان
Controlling for bond and issuer characteristics, bond spreads are expected to be equal across different legal jurisdictions, and differences are expected to disappear through arbitrage. However, an analysis of 490 U.S. dollar–denominated bonds issued by 53 emerging market sovereigns during 1990–2015 reveals that after the financial crisis of 2008, launch spreads of sovereign bonds issued under U.K. law have been higher than those issued under U.S. law, by 130 basis points for BB+ bonds and 175 basis points for B− bonds. This effect was not significant for investment grade bonds. On average, bonds issued under U.K. law had weaker ratings and shorter tenors post-crisis. The post-crisis impact of governing law on sovereign bond spreads is not explained by collective action clauses, or first-time bond issuances. Instead, the difference seems to be related to the perception that U.S. law offers stronger investor protection, and that the investor base for bonds issued under U.S. law is larger than that for bonds issued under U.K. law. The difference in spreads persists in the secondary market even after 180 days, perhaps because of the lack of liquidity, as investors tend to buy and hold these more attractive bonds on a longer-term basis.
5. Conclusions and policy considerations
This paper explored the phenomenon of higher launch spreads of dollar-denominated sovereign bonds issued under U.K. governing law when compared to those under U.S. governing law. This effect was not evident before the global financial crisis of 2008. Even after controlling for bond characteristics or macroeconomic variables, differences between the United States and U.K.'s legal systems, seem important in explaining bond-pricing differences. The difference in spreads persists in the secondary market even after 180 days. We tested some plausible explanations for the spread difference between bonds governed by these two legal jurisdictions. Collective action clauses contributed to higher spreads, but only before the crisis. In fact, post-crisis, CACs are almost equally prevalent in both jurisdictions. Also, the difference in spreads arose due to a lowering of spreads of U.S. governing law bonds after the crisis. Furthermore, it is SEC registration that drives the spread difference. We argue that in the post-crisis period, higher compliance costs and disclosure requirements associated with SEC registration and U.S. law listing may have encouraged some issuers to opt for the U.K. law. On average, bonds issued under U.K. law had weaker ratings and shorter tenors in the post-crisis period, indicating issuers with weaker creditworthiness.