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Emerging market firms a new globalization force...page 2

There are strong signs of mutually reinforcing links between commercial and financial globalization

The shift in economic and financial power toward the developing world is also reshaping cross-border corporate finance, transforming emerging-market Firms into signifi cant participants in international capital markets. The progress of a growing number of developing countries in improving the soundness and transparency of domestic institutions and policies has enabled their Firms to gain increased access to international bond and equity markets, and at better terms, in their efforts to expand globally. Nearly two-thirds of emerging-market firms that have been active acquirers since the late 1990s—those Firms that have undertaken 10 or more acquisitions—have tapped international markets to access one or more forms of fi nancing through syndicated loans, bond issues, and equity listings. As evidence of the mutually reinforcing links between commercial and financial globalization, a growing number of emerging-market Firms undertake at least one cross- border acquisition within two years of accessing international capital markets. International bond issuance, in particular, by borrowers based in emerging markets has grown dramatically since the mid-1990s and is now one of the main sources of capital inflows for those countries. Since 1995, a large number of emerging private companies have engaged in high-profi le global bond market transactions, with 80 of them issuing bonds over $1 billion each, of which 10 were issuances of over $2 billion. Some prominent issuers include Petrobras International Finance Company of Brazil, América Móvil of Mexico, Novelis Inc of India, and VTB bank of Russia. Over the next decade and beyond, there is likely to be signifi cant scope for emerging-market companies to further expand their access to international capital markets and at more favorable terms. cont'd 

Cross-border corporate finance has also seen a growing emerging market presence and this is set to grow as their access to global capital eases with rising incomes




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