Foreign bonds
Also called: Samurai bond, Panda bond, Yankee bond, Kangaroo bond · Topic: Financial Markets, Instruments, Insurance and Pensions · NCERT: Beyond NCERT
Meaning
Foreign bonds are bonds that a borrower issues in another country's market, in that country's currency. They let governments and companies tap investors abroad. Each market has a popular nickname for these bonds:
| Name | Market |
|---|---|
| Yankee | USA |
| Samurai | Japan |
| Bulldog | UK |
| Panda | China |
| Kangaroo | Australia |
Example
An Indian company that sells yen-denominated bonds to investors in Japan is issuing Samurai bonds. If it sells dollar bonds in the US market, they are Yankee bonds. In both cases the Indian company has to repay in foreign currency, so it carries the exchange-rate risk.
Don't confuse with
- Masala bonds: these are issued abroad but denominated in rupees, so the foreign investor bears the currency risk. With foreign bonds, the bond is in the host country's currency.
Related concepts
- Corporate bond
- Debenture
- Convertible bond
- Foreign Currency Convertible Bond
- Masala bonds
- Perpetual bond
- AT1 bonds
- Green bonds
- Sovereign green bonds
- Blue bonds