Corporate Bonds Market and Public Debt Management Policy in Georgia

Bonds as a debt securities and an alternative to bank lending, is one of the most important sources of funding for the corporation in a market economy. The development of the corporate bond market contributes to the diversification of the financial system and the efficient redistribution of savings, which in turn ensures stable economic growth in the country and the well-being of society.
The development of the corporate bond market in Georgia is associated with specific challenges, in particular, the paper discusses the dynamics of the activation of the corporate market in recent years, however, the dominance of the banking system in the Georgian financial sector. Given this low non-competitive environment and the low level of development of the capital market in the country, the factors hindering the development of the corporate bond market.
At the same time, the paper analyzes the impact of public debt management policy on the corporate bond market and the current challenges of Georgia's public debt management policy: the paper shows that it is important for the development of the corporate bond market to reduce sovereign risks and develop the right public debt management policy. Unreasonable spending of public debt may even lead to a sovereign crisis, which increases the risks associated with corporate bonds and reduces the ability of corporations to find financial resources. Also, in order to create a less risky debt portfolio in the case of Georgia, it is necessary to reduce the risks associated with the public debt portfolio and develop the debt securities market, which in turn will promote the development of the corporate lending market.