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Eurobonds

Eurobonds

A Eurobond is a bond that is issued by a borrower outside of its home country and denominated in a currency other than its home currency. For example, a US company could issue Eurobonds that are denominated in euros.

Eurobonds are typically issued in the eurocurrency markets, which are the international financial markets where euro-denominated securities are traded. The eurocurrency markets are not located in any one country, but rather are spread across the globe.

Eurobonds offer a number of advantages to borrowers. First, they can access a wider pool of investors than if they were to issue bonds in their home country. Second, they can often obtain lower interest rates on Eurobonds than they would on bonds issued in their home country. Third, they can issue Eurobonds in a currency that is not their home currency, which can help to hedge against currency risk.

Eurobonds also offer a number of advantages to investors. First, they can invest in Eurobonds that are denominated in a currency that is not their home currency, which can help to diversify their portfolios. Second, they can often obtain higher yields on Eurobonds than they would on bonds issued in their home country. Third, Eurobonds are typically more liquid than bonds issued in their home country, which means that they can be more easily bought and sold.

However, Eurobonds also have some disadvantages. First, they are not subject to the same level of regulation as bonds issued in their home country. This means that there is a greater risk of default. Second, Eurobonds are often more expensive than bonds issued in their home country. This is because they are issued in a less liquid market.

Overall, Eurobonds can be a good investment for both borrowers and investors. However, it is important to carefully consider the risks and rewards before investing in Eurobonds.

About Impact Capital Partners

At Impact Capital Partners, our mission is to connect institutional capital with the growing impact investment market to address the world’s most pressing challenges. By utilizing impact investments, institutional investors are able to generate positive, measurable social and environmental impact alongside a financial return. We are constantly finding new impact investment opportunities in both emerging and developed markets, targeting market-rate returns. Schedule a call with us HERE if you’re interested in learning more about our impact investing strategies.

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