Ch012 International Bond Market.doc

Eun Resnick 4e CHAPTER 12 International Bond Market The World’s Bond Markets: A Statistical Perspective Foreign Bonds and Eurobonds Bearer Bonds and Registered Bonds National Security Regulations Withholding Taxes Other Recent Regulatory Changes Global Bonds Types of Instruments Straight Fixed-Rate Issues Euro-Medium-Term Notes Floating-Rate Notes Equity-Related Bonds Zero-Coupon Bonds Dual-Currency Bonds Currency Distribution, Nationality, and Type of Issuer International Bond Market Credit Ratings International Finance in Practice: Heineken Refreshes Euromarket with Spectacular Unrated Bonds Eurobond Market Structure and Practices Primary Market Secondary Market Clearing Procedures International Bond Market Indexes Summary MINI CASE: Sara Lee Corporation’s Eurobonds The World’s Bond Markets: A Statistical Perspective In any given year, what percent of new international bonds are likely to be Eurobonds rather than foreign bonds 80% 45% 25% 15% Answer: a Foreign Bonds and Eurobonds A “foreign bond” issue is one denominated in a particular currency but sold to investors in national capital markets other than the country that issued the denominating currency one offered by a foreign borrower to investors in a national market and denominated in that nation’s currency for example, a German MNC issuing dollar-denominated bonds to U.S. investors b and c Answer: d A “Eurobond” issue is one denominated in a particular currency but sold to investors in national capital markets other than the country that issued the denominating currency usually a bearer bond for example a Dutch borrower issuing dollar-denominated bonds to investors in the U.K., Switzerland, and the Netherlands All of the above Answer: d In any given year, rightly 80 percent of new international bonds are likely to be Eurobonds Foreign currency bonds Domestic bonds None of the above Answer: a “Yankee” bonds are dollar-denominated foreign bonds originally sold to U.S. investors yen-denominated foreig