Eurobond

From Wikipedia, the free encyclopedia

A Eurobond is a bond that has been issued in one country's currency but is traded outside of that country and in a different monetary system. Eurobonds are named after the currency they denominate. An example is the Euroyen or Eurodollar bond, trading respectively in the Japanese yen and the American dollar. Because such Eurobonds are spread around global markets, most are of a type known as Bearer bonds. A Bearer bond is officially owned by whoever is holding it. They have a series of small coupons that border the bond itself. On an annual basis, one of the coupons is cut from the bond and taken to a bank that is listed as one of the paying agents. The bank will pay the holder of the coupon the interest payment due. Usually, no official records are kept.

The majority of Eurobonds are now owned in 'electronic' rather than physical form. The bonds are held and traded within one of the clearing systems (Euroclear and Clearstream being the most common). Coupons are paid electronically via the clearing systems to the holder of the Eurobond (or their nominee account).

Eurobonds: They are issued by a multinational syndicate in all countries other than the one in whose currency the bond is denominated. These bonds are not traded on a specific national bond market.

Eurobonds: Underwritten by international syndicate of banks; Issued by governments and banks; Issued in eurocurrencies; Bearer bonds; Annual interest paid gross - fixed or floating rates; Usually sold over the counter by banks but may also be listed on the stock exchange; Yield is generally based on the yield curve of denominated currency.