Factors Affecting the Issuance of Corporate Bonds in Tanzania

This dissertation investigated the factors affecting the issuance of corporate bonds in Tanzania, the main objective of the dissertation was to investigating empirically a set of factors that affect the issuance of corporate bonds in Tanzania, these factors are corporate bonds restrictive covenants, corporate bonds markets liquidity and corporate bonds information knowledge among investors in Tanzania. The research methodology employed a sample of 48 companies in Dar Es Salaam. The study involved Univariate, Bivariate and multivariate analyses which came up with correlation and regression models to explain variables relationships. The study found that there is a strong relationship between the variables, corporate bonds restrictive covenants as one of the independent factors was negatively related to the issuance of corporate bonds, the more the covenants were stringent the more companies shied away from issuing corporate bonds, but the rest of the independent factors; corporate bonds markets liquidity and corporate bonds information & knowledge among investors were positively related to the issuance of corporate bonds, that is the more the markets were liquid and the more investors were informed and knowledgeable about corporate bonds the more companies were willing to issue corporate bonds. The study recommends that in order to improve liquidity and awareness on corporate bonds markets, there is a need to introduce credit rating agencies, public education on bonds, monetary laws to protect investors and policies to encourage issuance of corporate bonds.