Annex B. Methodology for data collection and classification
The OECD conducted an extensive survey, the “OECD Survey on Access to Corporate Bond Markets for Growth Companies in Asia” (OECD Survey) that was answered by 19 jurisdictions namely: Australia, Bangladesh, Cambodia, Hong Kong (China), India, Indonesia, Japan, Korea, Lao PDR, Malaysia, Mongolia, Pakistan, China, Philippines, Singapore, Sri Lanka, Chinese Taipei, Thailand and Viet Nam. The survey was conducted in the first half of 2023.
Among many other things, the OECD Survey explored the practices in these jurisdictions relating to the corporate bond issuance procedure, measures to support access to corporate bond markets for companies, tax treatment of corporate bonds, marketplaces for listing and trading corporate bonds, credit rating requirements, bondholder rights and barriers to the development of corporate bond markets.
Data presented on corporate bonds are based on OECD calculations using data obtained from LSEG that provides international deal-level data on new publicly and privately issued corporate bonds that are underwritten by an investment bank. The database provides a detailed set of information for each corporate bond issue, including the identity, nationality and sector of the issuer; the type, interest rate structure, maturity date and rating category of the bond; and the amount of and use of proceeds obtained from the issue.
Convertible bonds, deals that were registered but not consummated, preferred shares, sukuk bonds, bonds with an original maturity less than or equal to 1 year or an issue size less than USD 1 million are excluded from the dataset. The industry classification is carried out based on LSEG Business and Industry Classifications. The country breakdown is carried out based on the issuer’s country of domicile. Yearly issuance amounts initially collected in USD were adjusted by 2022 US Consumer Price Index (CPI). Information provided is adjusted by CPI and presented in 2022 USD.
Given that a significant portion of bonds are issued on foreign markets, it is not possible to assign such issues to a single market. For this reason, the country breakdown is carried out based on the jurisdiction of domicile of the issuer.
The OECD definition of a “growth company” is a small and medium-sized enterprise (SME) with the potential to rapidly expand, create jobs, increase productivity, push the frontiers of innovation and challenge the status quo with new products and business models. In this report, corporate bonds issued by growth companies refers to issuances of less than USD 50 million.
Australia participated in the survey without being an Asian jurisdiction. Data referring to Asia as a region, for simplicity, includes Australia, and the following 18 Asian jurisdictions: Bangladesh, Cambodia, China, Hong Kong (China), India, Indonesia, Japan, Korea, Lao PDR, Malaysia, Mongolia, Pakistan, Philippines, Singapore, Sri Lanka, Chinese Taipei, Thailand and Viet Nam.
Rating data
LSEG provides rating information from the three leading rating agencies: S&P, Fitch and Moody’s. For each bond that has rating information in the dataset, a value of 1 is assigned to the lowest credit quality rating (C) and 21 is assigned to the highest credit quality rating (AAA for S&P and Fitch and Aaa for Moody’s). There are eleven non-investment grade categories: five from C (C to CCC+); and six from B (B- to BB+). There are ten investment grade categories: three from B (BBB- to BBB+); and seven from A (A- to AAA).
If ratings from multiple rating agencies are available for a given issue, their average is used. Some issues in the dataset, on the other hand, do not have rating information available. For such issues, the average rating of all bonds issued by the same issuer in the same year (t) is assigned. If the issuer has no rated bonds in year t, year t-1 and year t-2 are also considered, respectively. This procedure increases the number of rated bonds in the dataset and hence improves the representativeness of rating-based analyses. When differentiating between investment and non-investment grade bonds, the final rating is rounded to the closest integer and issues with a rounded rating less than or equal to 11 are classified as non-investment grade.
Early redemption data
When calculating the outstanding amount of corporate bonds in a given year, issues that are no longer outstanding due to being redeemed earlier than their maturity are deducted. The early redemption data and cover bonds that have been redeemed early due to being repaid via final default distribution, called, liquidated, put or repurchased are obtained from LSEG. The early redemption data is merged with the primary corporate bond market data via international securities identification numbers (i.e. ISINs).
The main source of market capitalisation information provided in Chapter 2 is LSEG. Data is collected at the end of 2022 in current USD, thus no currency nor inflation adjustments are needed. The dataset includes the 38 998 non-financial listed companies. With the aim of including only listed companies on the main stock exchanges, the following securities are excluded: