2.14.1 Eurobonds and Eurodollar Bonds
Eurobonds are a type of international bond and are unique primarily in the way they are issued. A Eurobond is denominated in a currency other than that of the country where it is issued (sold) or where the company is headquartered.
Typically issued by multinational corporations and national governments, Eurobonds are underwritten by foreign banks or broker-dealers and typically sold to the same market as that in which the bond’s currency is based (though this is not a requirement). For instance, bonds may be issued and sold in Britain by a Kuwaiti company and denominated in the pound. The currency in which the Eurobond is based will also be the currency in which the principal and interest are paid.
Issuers often choose Eurobonds because they can pay better interest rates in the chosen denomination. Moreover, an issuer may choose to issue the bond in a country with the fewest regulatory constraints and in