25.03.2019

Eurobonds are the type of securities. These are stocks produced in the currency, that is not native for  emitters (organizations, which release shares for their own development) for foreign investors, for whom the currency also can be not native.

Nominal value is represented in US dollars. Eurobonds constitute coupons, thanks to which their owners can get their percent within a specified time frame.

Interesting fact. The prefix «euro», which you can see in the name, is not connected with the currency of eurobonds or the place they are released. This is only a conventional thing, because first eurobonds were produced in Europe.

Who can be the issuer of eurobonds?

These securities can be produced by:

• governments of different states;
• local authorities;
• international organizations;
• big corporations which want to interest foreign investors and get long-time investments (from 1 to 40 years).

It is when the real price is lower than nominal in case of compensation in the other currency (different from the currency of the loan).

Types of eurobonds. They are classified according to 2 parameters:

• the method of payment;
• the method of repayment.

According to the first factor, there are 5 types of eurobonds:

1. fixed rate bonds;
2. zero coupon bonds;
3. capital growth bonds;
4. deep discount bonds;
5. floating rate note.

Taking into accound a second factor, 4 types of these securities may be distinguished:

1. bonds with call option;
2. bonds with put option;
3. restractable bonds (with both call and put option);
4. bullet bonds (without a right of early withdrawal by an issuer).

Conclusion: peculiarities of eurobonds

These securities have such specifities:

• they are issued with the help of emission syndicates, which consist of banks or brokers from several countries;
• their expiration date can be from 1 up to 40 years (most often — from 3 to 30 years);
• they can be offered on the markets of deveral countries at the same time;
• their currency is foreign both for issuers and investors;
• their nominal value is represented in USD.

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