Key Takeaways
- Global debt markets reached record issuance, yet issuers struggle to access international capital beyond domestic investor bases.
- Cross-border participation is constrained by operational, custody and settlement barriers that limit investor access.
- Direct local market entry requires investors to navigate domestic settlement systems and establish local custody arrangements.
- Global Depositary Notes translate locally issued bonds into internationally accessible securities, broadening investor access.
From Local Debt to Global Capital: The Growing Role of GDNs in Expanding Investor Access
Global debt capital markets have remained highly active over the past year, despite geopolitical uncertainty, trade tensions and shifting interest-rate expectations. According to the Organization for Economic Co-operation and Development (OECD), governments and companies borrowed a record $27 trillion in 2025.1 With global bond markets now worth approximately $109 trillion — equivalent to around 93% of world GDP — debt continues to play a central role in connecting issuers with investors.2 This momentum has continued into 2026, with borrowing forecast to rise to $29 trillion.3
As debt markets continue to expand, issuers are looking beyond domestic investor bases to access deeper pools of international capital, while investors continue to seek new sources of yield and diversification, particularly within emerging markets. Yet bringing issuers and international investors together is not always straightforward. In many local debt markets, operational, custody and settlement barriers can make cross-border participation complex or inefficient, limiting investor access and constraining issuers’ ability to broaden distribution.
Global Depositary Note (GDN) bridge this gap. By enabling access to locally issued debt through established international trading, clearing and settlement infrastructure, GDNs help connect domestic capital markets with global investors, while also helping issuers to access funding sources outside their home markets.
Bridging Local Issuance and International Demand
Global debt markets are expanding rapidly, boosting demand for GDNs. The number of GDNs issued rose in 2025 and this growth has accelerated in 2026, supported by rising issuance activity and growing international investor appetite for emerging market debt opportunities.
Unlike traditional equity Depositary Receipts (DRs), which provide investors with access to the shares of a non-US company, GDNs are created by a depositary bank that represents an issuer’s locally traded debt. This structure provides access to domestic bonds through established international trading, clearing and settlement infrastructure.
For investors, GDNs provide access to local debt markets without the need to establish local custody arrangements, navigate domestic settlement systems or open local market accounts.
GDNs provide issuers with access to a wider pool of international capital while continuing to issue notes in their domestic market.
Spotlight on Latin America
Sovereign borrowing from debt markets by emerging market nations reached $4 trillion in 2025, bringing total outstanding sovereign debt to $14 trillion — the highest level since 2007.4
One region where this trend has become particularly clear is Latin America, where sovereigns and corporates, faced with relatively concentrated local capital markets and seeking to tap global investment, are seeking structures that enable international participation without shifting issuance away from home markets.
There is growing demand for these instruments. But while global investors want emerging market debt exposure, direct participation can be constrained by local custody, settlement and foreign exchange requirements. GDNs bridge that gap by transforming locally issued bonds into internationally accessible securities, giving offshore investors a more efficient route into the region’s debt markets.
As issuance has expanded, GDN activity has accelerated across markets like Colombia, Uruguay, Chile, Peru, Paraguay and Costa Rica, reflecting increasing interest among both issuers and investors.
As one of the world’s leading DR banks, BNY has supported issuers and investors seeking to connect local debt markets with international pools of capital. Recent transactions in Costa Rica and Paraguay provide a snapshot of how GDN structures are helping facilitate this in practice.
Sovereign Issuer: Costa Rica
In the past, international investors had limited direct access to Costa Rica’s sovereign bonds. Investors faced cross-border operational and settlement complexity, while Costa Rica needed to diversify demand across multiple maturities and currencies while preserving local issuance flexibility.
To address these challenges, BNY established 102 GDN programs backed by Costa Rican sovereign bonds, converting local instruments into internationally investable securities. This structure enabled investors to access Costa Rican debt through international clearing channels rather than local Costa Rican market infrastructure.
The GDNs represented more than $3 billion across the issuances, demonstrating the ability of GDNs to open new local debt markets to international investors while preserving domestic issuance frameworks.5
Corporate Issuer: Tigo Paraguay
In Paraguay, telecommunications operator Tigo Paraguay sought access to a more diverse group of investors while continuing to issue debt in its domestic market. At the same time, international investors faced barriers to accessing local Paraguayan bonds.
To fill this gap, BNY issued GDNs backed by local Paraguayan bonds, marking the first time the firm had issued a corporate GDN. This structure enabled investors to gain exposure to bonds denominated in Paraguayan Guarani without requiring direct local market access; connecting the issuance to international settlement channels and facilitating participation from offshore institutional investors.
The GDNs represented the equivalent of approximately $77 million, illustrating the growing use of GDNs as a practical solution for accessing international capital without local custody requirements for investors.6
The Next Phase of GDN growth
Though Latin America has emerged as a particularly active region, the growth of GDNs is part of a broader global trend. In 2025 alone, BNY established 65 GDN programs across sovereign and corporate issuers, supporting activity in markets including Costa Rica, Paraguay and Peru.
This momentum reflects the practical role GDNs can play in reducing barriers to cross-border participation. By enabling domestic debt securities to be accessed through established international trading, clearing and settlement infrastructure, they can broaden investor access while helping issuers access a more diverse group of investors.
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This material may not be reproduced or disseminated in any form without the express prior written permission of BNY. BNY will not be responsible for updating any information contained within this material and opinions and information contained herein are subject to change without notice. Trademarks, service marks, logos and other intellectual property marks belong to their respective owners.
© 2026 BNY. All rights reserved. Member FDIC.
Disclaimer BNY is the corporate brand of The Bank of New York Mellon Corporation and may be used to reference the corporation as a whole and/or its various subsidiaries generally. This material and any products and services mentioned may be issued or provided in various countries by duly authorized and regulated subsidiaries, affiliates, and joint ventures of BNY. This material does not constitute a recommendation by BNY of any kind. The information herein is not intended to provide tax, legal, investment, accounting, financial or other professional advice on any matter, and should not be used or relied upon as such. The views expressed within this material are those of the contributors and not necessarily those of BNY. BNY has not independently verified the information contained in this material and makes no representation as to the accuracy, completeness, timeliness, merchantability or fitness for a specific purpose of the information provided in this material. BNY assumes no direct or consequential liability for any errors in or reliance upon this material.
This material may not be reproduced or disseminated in any form without the express prior written permission of BNY. BNY will not be responsible for updating any information contained within this material and opinions and information contained herein are subject to change without notice. Trademarks, service marks, logos and other intellectual property marks belong to their respective owners.
© 2026 BNY. All rights reserved. Member FDIC.