Eurobond Markets

Question 1

Define Eurobonds

Answer 1

1. Bonds that are denominated in a currency other than that of the country in which they are issued
2. They are fixed-rate and interest-bearing notes

Question 2

Explain some concepts of Eurobonds

Answer 2

1. Called “bearer bonds” and are international bonds
2. Not registered centrally so, whoever holds the bond is considered the owner. They can be held anonymously.
3. Denominated and issued in a euro currency.
4. Annual coupons.

Question 3

Who are the main holders of Eurobonds?

Answer 3

1. Private individuals - seeking to mitigate liability to tax.
2. Institutional investors - hold them as part of diversified portfolios.

Question 4

How are Eurobonds traded?

Answer 4

1. They are traded in the OTC (over-the-counter) markets
2. Regulated by the International Capital Markets Association (ICMA)
3. Syndicate companies and their investor clients are considered primary market for Eurobonds.
4. Once they are resold to general investors, the bonds and the secondary market.