Dual Currency Issue

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Dual Currency Issue

A bond in which coupons are paid in one currency while the principal is paid in another. Dual currency issues set an exchange rate that usually allows payments in the stronger currency to appreciate more. There are number of ways to calculate the exchange rate; the three most common are to use the exchange rate at the time of issue, the spot rate at the time payments are made, and to use a third currency to determine the value of the other two. Dual currency issues are most commonly used by (and are most valuable to) multinational corporations and traders on the eurobond market.