--%>
Assignment Help - homework help

Foreign bonds and Eurobonds

List some of the differences between the foreign bonds and Eurobonds and also describe why Eurobonds make up lion’s share of the international bond market.

E

Expert

Verified

Two segments of international bond market are:

a) Eurobonds and
b) Foreign bonds.

Foreign bond issues are the one that is provided by the foreign borrower to investors in the national capital market and is denominated in that nation’s currency.  Eurobond issue is one that is denominated in particular currency, however, sold to investors in the national capital markets other than the country that issues denominating currency.

Eurobonds make up over 80 percent of international bond market.  Two important causes for this arise from the fact that U.S. dollar is the currency that is frequently sought in the international bond financing.  Firstly, Eurodollar bonds is brought to the market more rapidly as compared to the Yankee bonds since they are not provided to the U.S. investors and therefore do not have to meet the strict SEC registration requirements.  Secondly, Eurobonds are bearer bonds which give anonymity to the owner and therefore provide the mode for evading the taxes over the interest received.  Due to this, investors are usually willing in order to accept the lower yield on Eurodollar bonds as compared to the registered Yankee bonds of comparable terms, where the ownership is recorded.  For borrowers, lower yield means a lower cost of debt service.

   Related Questions in Financial Accounting

  • Q : Equity and social exchange theory What

    What is the difference between the equity theory and the social exchange theory ? Define both the theories in brief.

    		•
  • Q : Regions where uniform costing can be

    Write down the regions where uniform costing can be executed?

    		•
  • Q : Accouning Required parts are clearly

    Required parts are clearly describes at the end of the questions and additional resource contains the journal article related to question three.. Approx 2000 word assignment.. First Question is of not more than 1000 words to make memorandum and its example is given at end of assignment and require

    		•
  • Q : Deposit-loan rate spread in Eurodollar

    Explain, how does deposit-loan rate spread within the Eurodollar market as compared to the deposit-loan rate spread in domestic U.S. banking system and why?

    		•
  • Q : Personal identities-Organization health

    Personal identities: Generally employees like to work as they interact with animals and success motivates them, they learn new things in their routine job and they are a member to team.  But some job requirements like conducting euthanasia impact

    		•
  • Q : Finalization of Accounts What does the

    What does the term Finalization of Accounts mean?

    		•
  • Q : Define Liabilities Liabilities mean the

    Liabilities mean the amount which the firm owes to the outsiders. Liabilities are of two types: -Long term liabilities & Short term liabilities. Examples of long term liabilities are long terms loans, bonds etc. & examples of short term liabil

    		•
  • Q : What is Assets in Accounting Assets are

    Assets are those resources that the business owns. Assets are the things of value owned which enable the firm to get cash or befit in future. There are mainly two types of assets: - Current assets & Fixed assets for e.g. cash, f

    		•
  • Q : Define purchase budget Give a short

    Give a short introduction of the term ‘purchase budget’?

    		•
  • Q : Country and political risk What is

    What is country risk and how it is different from the political risk?

    		•