Determinants for issuing international bonds by Brazilian firms

Abstract

One of the most important topics studied in the finance literature is the capital structure of companies. This paper seeks to understand the determinants for the issuance of private debt securities (bonds) in the international market by Brazilian companies. We analyzed 472 non-financial listed companies from 2001 to 2009. We used probit and panel regression models to analyze the determining factors for the issuance of international bonds and estimate the probability for a Brazilian company to issue these securities. The results indicate that firm size and its exporting capacity are positively related to international bonds. There is a negative relation between the existence of foreign shareholders and the issuance of international bonds. Adopting good corporate governance practices,such as listing ADRs in the US or on Brazilian’s New Market,is positively related to international bonds in a few models.