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Corporate Bonds: Analyzing the availability of the Swedish bond market
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
2006 (English)Independent thesis Basic level (degree of Bachelor), 10 points / 15 hpStudent thesis
Abstract [en]

In the past, the Swedish bond market has been distinguished for its illiquidity and difficulties with retrieving information. This is the starting point of our thesis and the purpose is to analyze and describe the availability of the present corporate bond market for manufacturing firms in Sweden. In order to fulfill the purpose, a qualitative method was used and interviews with different operators of the market were conducted. Our respondents were sampled from large issuing companies, the major intermediaries and companies that have not tried bonds as a financing tool.

To fulfill our purpose, we analyzed subjects as credit rating, capital market segmentation, regulations and volume. We came to the conclusion that the Swedish corporate bond market is somewhat underdeveloped. This is due to the lack of public information regarding the bonds, such as prices, outstanding bonds and interest rates.

The availability for already active companies is good, mainly due to the important role the intermediaries play. The regulations set by authorities do not have great effect on the large companies in general, since they issue large amounts, the cost associated with the regulations do not affect them in a considerable way. One could rather see a positive side with the regulations, for example the increase of foreign issuers that entered the market the last couple of years and hence increasing the liquidity. A credit rating is sometimes beneficial but not always, it is not a necessity to enter the bond market.

As a matter of fact, it seems like volume is the most important reason to why medium-sized companies have limited access to the market. Since the minimum recommended volume to issue is 50 million SEK, many companies are excluded due to lack of financing need. Another important factor concerning medium-sized companies is that they do not have sufficient experience, knowledge or interest in the bond market. There are probably companies that would like to enter the bond market, who do not have the opportunity to do so, but this do not have anything to do with the lack of credit rating, rather the high cost associated with it.

The conclusion drawn is that it is hard to compare small and medium-sized companies with large already established actors. This is due to different need of capital and overall knowledge about the debt market.

Place, publisher, year, edition, pages
2006. , 52 p.
Keyword [en]
Corporate bonds, bonds, bond market, capital market
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-458OAI: oai:DiVA.org:hj-458DiVA: diva2:4172
Uppsok
samhälle/juridik
Supervisors
Examiners
Available from: 2006-06-26 Created: 2006-06-26

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a93f96d705dd3546afcac70d2063b0ab6f735f329da11bf38f1cc7c0d43746c648ac8f52
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CiteExportLink to record
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Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
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  • asciidoc
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