A Eurobond is a bond issued offshore by governments or corporates denominated in a currency other than that of the issuer's country. Eurobonds are usually long-term debt instruments.
Eurobonds are typically denominated in US Dollars (USD). Euro, Japanese Yen, Swiss Francs and other currency denominated Eurobonds are also available.
Features and Advantages
- Typical maturities are 5-30 years.
- The coupon interest may be fixed or floating. Payments may be annual or semi-annual.
- Although issued as long term, Eurobonds may be sold before maturity; the market conditions at the date of cash-in are taken the as basis for the sale price. Higher than expected returns can be obtained in a market where interest rates decline, but the reverse is also possible.
- When sold, the bonds are made out to the bearer; however, physical delivery to the buyer in reality is not possible.
- The difference between buy-sell quotations varies according to the liquidity and transaction volume of the bond.
- The standard value date is the transaction date plus two business days.
- The minimum value of Eurobonds sold by HSBC is 1,000 USD/EUR and its multiples
- In an environment where FX and TRY deposit interest rates are falling, Eurobonds are a high profit investment opportunity for foreign currency investors.
- Eurobonds offer partial tax advantages.
- You may easily invest in Eurobonds through HSBC Bank Branches.
For 2020 tax regulations, please click here.