corporate or government bond denominated in a currency other than the national currency of the issuer. These bonds are ordinarily issued in bearer form by international syndicates of commercial banks and investment banks that bid on securities offered for sale through a tender panel. Eurobonds may be issued in a single currency, in multicurrency form, or a unit of account, such as the European Currency Unit (ECU). An important capital source for multinational companies, Eurobonds are cleared and settled through Euroclear and Cedel, two bank-owned clearing houses. Borrowing in the Eurobond market often makes it possible to obtain financing at lower interest rates.
bonddenominated in U.S. dollars or other currencies and sold to investors outside the country whose currency is used. The bonds are usually issued by large underwriting groups composed of banks and issuing houses from many countries.
bond denominated in U.S. dollars or other currencies and sold to investors outside the country whose currency is used. The bonds are usually issued by large underwriting groups composed of banks and issuing houses from many countries. An example of a Eurobond transaction might be a dollar-denominated debenture issued by a Belgian corporation through an underwriting group comprised of the overseas affiliate of a New York investment banking house, a bank in Holland, and a consortium of British merchant banks; a portion of the issue is sold to French investors through Swiss investment accounts. The Eurobond market is an important source of capital for multinational companies and foreign governments, including Third World governments.
