Determinants of corporate bond yield among developer companies in Malaysia / Nor Izati Ahad

Issuing bonds is an alternative for a company to raise capital which has been a competition to loans. Many companies have chosen to issue bonds and be a borrower to their investors instead of being indebted to banks. Previous studies have examine the determinants of the bond yield, however this study intends to investigate the more specific area of studies which is to investigate the determinants of corporate bond yield in the case of top developer companies in Malaysia. In determining the top companies which will be used as the sample, the market capitalization were compared as the benchmark for the companies to be selected. This has resulted in the choice of samples of companies which are Gamuda Berhad, UEM Sunrise Berhad, Mah Sing Group Berhad, SP Setia Berhad and ECO World Development Group Berhad. The bond yield is believed to be determined by both the issuers, as well as the characteristics of the bond itself. The variables are tested using multiple regression analysis over the 5 years period starting form year 2012 to 2016. The variables used are bond yield as the dependent variable, whilst debt to equity, return on equity, earnings before interest, tax, depreciation and amortization (EBITDA) and bond maturity as the independent variables. The findings of this study indicates the significant relationship between the EBITDA as well as the bond maturity with the bond yield. However, on the contrary, both debt to equity and return on equity show no significant relationship with the corporate bond yield.