Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A eurobond with a fixed coupon. Eurobonds are bonds issued or traded in a country using a currency other than the one in which the bond is denominated. This means that the bond uses a certain currency, but operates outside the jurisdiction of the central bank that issues that currency. Eurobonds are issued by multinational corporations; for example, a British company may issue a eurobond in Germany, denominating it in U.S. dollars. Euro straight bonds provide a degree of certainty unavailable to variable coupon bonds, but expose an investor to interest rate risk. It is important to note that the term has nothing to do with the euro, and the prefix "euro-" is used more generally to refer to deposits outside the jurisdiction of the domestic central bank.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved