Loans versus bonds: do GCC firms benefit from going public?

We compare the yields on similar USD-denominated bonds and loans issued or obtained by firms in Gulf Cooperation Council (GCC) countries using manual matching and propensity scores matching procedures. We find that the average bond yield is lower than the average loan yield, with the difference ranging between 9 and 15 basis points depending on the matching procedure used. Nonetheless, none of the differences found in our study are economically meaningful or statistically significant. This means that GCC firms are unlikely to benefit financially from choosing one of these debt instruments over the other.