01597cas a2200253 a 4500 AALejournalIMF005825 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451872576 1018-5941 BD-DhAAL BD-DhAAL Wiener, Zvi. Credit Risk Spreads in Local and Foreign Currencies / Zvi Wiener, Dan Galai. Washington, D.C. : International Monetary Fund, 2009. 1 online resource (20 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The paper shows how-in a Merton-type model with bankruptcy-the currency composition of debt changes the risk profile of a company raising a given amount of financing, and thus affects the cost of debt. Foreign currency borrowing is cheaper when the exchange rate is positively correlated with the return on the company's assets, even if the company is not an exporter. Prudential regulations should therefore differentiate among loans depending on the extent to which borrowers have "natural hedges" of their foreign currency exposures. Mode of access: Internet Galai, Dan. IMF Working Papers; Working Paper ; No. 2009/110 Full text available on IMF http://elibrary.imf.org/view/journals/001/2009/110/001.2009.issue-110-en.xml IMF e-Library