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Eurobond

In: Business and Management

Submitted By nitishunt
Words 901
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Euro bonds and International bonds
Debt investments that are issued in a country by a non-domestic entity. International bonds are issued in countries outside the United States, in their native country's currency. They pay interest at specific intervals, and pay the principal amount back to the bond's buyer at maturity.
International bonds include eurobonds, foreign bonds and global bonds. A different type of international bond is the Brady bond, which is issued in U.S. currency. Brady bonds are issued in order to help developing countries better manage their international debt. International bonds are also private corporate bonds issued by companies in foreign countries, and many mutual funds in the United States hold these bonds
Eurobonds –
A eurobond is a bond denominated in a currency not native to the issuer's home country. Eurobonds are commonly issued by governments, corporations, and international organizations.
How it works/Example:
Let's assume Company XYZ is headquartered in the United States. Company XYZ decides to go to Australia to issue bonds denominated in Canadian dollars. This is an example of a eurobond. In many cases, an issuer sells its eurobonds in a number of international markets. Company XYZ might sell its Canadian dollar-denominated bonds in Japan and Canada too.
Eurobonds are not the same as foreign bonds. An example of a foreign bond is a bond issued by U.S.-based Company XYZ in Australia and denominated in Australian dollars -- the home currency of the market in which the bonds are issued.
Eurobonds often trade on an exchange -- most often the London Stock Exchange or the Luxembourg Stock Exchange -- and they trade much like other bonds. The eurobond market is considered somewhat less liquid that the traditional bond market, but is still very liquid.
Eurobonds are usually "bearer bonds," meaning that there is no transfer...

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