Olivier Darmouni (HEC Paris) - The Rise of Bond Financing

Tutkimusseminaarit

Research Seminar - Olivier Darmouni (HEC Paris) - The Rise of Bond Financing

Abstract
Using newly available micro-data, this paper documents new evidence on the rise of bond financing to mid-size firms in the euro area. Recent new issuers of debt securities are typically small, private, and unrated. Traditional investors (insurers, mutual funds, ECB) are small for unrated and smaller issuers. This non-traditional investor base insulates these issuers from two well-documented drivers of the bond market cycle: volatile mutual fund flows and central bank bond purchases. These issuers nevertheless respond more than historical issuers to growth in other investor sectors, albeit with higher borrowing costs.

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