| dc.description.abstract | Corporate bonds are debt securities issued by private and public corporations (Roldes et
al 2004).The role of corporate bonds in achieving the vision 2030 cannot be down
played. Corporate bonds are considered as the source of diffusing stresses on the
banking sector by diversifying credit risks across the economy, interest rate and
refunding risk, Supplying long-term funds for long-term investment needs, lowering
funding costs by avoiding a liquidity premium and providing products with flexibility to
meet the specific. The main aim of this study was to investigate the effect of financial
market infrastructure on issuance of corporate bonds of firms listed at the Nairobi
security exchange. The study employed descriptive survey design with the population of
the study being 60 companies listed on the NSE. The study used secondary data from
annual reports of the quoted companies over a period of five years. The data was
analyzed through the use of Statistical Package for Social Sciences (SPSS). Results from
the study indicate that most firms in the NSE use more debt or long term liability as a
source of financing than equity capital from shareholders. ANOVA statistics
presented showed that the overall model was statistically significant as this was
supported by an F statistic of 3.4 and a probability (p) value of 0.021. Regression of
coefficients results showed that there was a positive relationship between corporate
bond and payment, settlement system, and recording system whose beta coefficients are
0.072, 0.000 and 0.215 respectively. Statistically significant variables in the study were
payment, settlement system, and recording system of the firm as they had p values of
0.000, 0.008 and 0.034 which is lower than the probability conventional of 0.05. These
findings show that companies in the NSE have good return on assets and have the
ability to meet their short term obligations when they fall due. The researcher suggests
a study be conducted through a survey of the firms which have issued corporate bond
and not listed in Nairobi Securities Exchange. This will allow for a comparison of the
findings to come up with recommendations that can be applicable to all the players
in the corporate world in Kenya. | en_US |
