Institutional Investors Drive Foreign Debt Market Growth During Financial Crisis
The article examines how the financial crisis affected foreign private debt issued in the U.S. compared to public debt. Foreign private debt increased significantly during the crisis, while domestic private debt remained stable. Qualified Institutional Buyers (QIBs) preferred funding foreign firms in the private debt market, offering better terms despite higher risks. This suggests a shift in financial intermediation towards quality private debt borrowers during the crisis.