Eurobond.
In plain English
A eurobond is a bond denominated in a currency other than that of the market where it is issued and sold. The name is a historical accident and has nothing to do with the euro: a dollar bond issued in Europe or Asia is a eurodollar bond, and a yen bond issued outside Japan is a euroyen bond. Borrowers use this market to reach international investors and to sit outside the registration rules of the currency's home country. These bonds are usually issued through international clearing systems rather than listed on a domestic exchange.
01Why it matters
It explains why a familiar company can have bonds trading under disclosure rules different from its home market, which matters when you hold an international bond fund and want to know what governs the paper.
02The math, step by step
Say a Brazilian company needs dollars. It issues a 500 million dollar bond through banks in London to investors worldwide. The debt is in dollars, the issuer is Brazilian, and the issuance sits outside United States registration. At a 7 percent coupon that is 35 million dollars of dollar interest a year the company has to earn or buy.
Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.
03What this is NOT
A eurobond is not a euro bond. The prefix marks issuance outside the currency's home jurisdiction, not the currency itself. A bond actually denominated in euros and issued inside the eurozone is simply a domestic bond there.
04Receipts
Every figure on this page is sourced to a primary document. Tap to open the original.
Plain-English answers from our glossary. Receipts included. Never advice.
Educational tool. Answers come only from ClearMoneySchool's published glossary and are not advice. Why we never give advice