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Eurobond's Evolution, Causes, And Contribution To Globalization

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EUROBOND - ITS EVOLUTION, NEED AND CONTRIBUTION TO GLOBALISATION

Introduction
This work will be examining the origins and evolution of Eurobond, the reason for its being popular with international investors and issuers, the kind of organisation that consider using Eurobond, for what purpose it is being used and how it has contributed to globalisation.
Eurobond, Foreign Bonds and Domestic bonds
Euro Bond which is now becoming a thing of fashion is a debt or loan denominated in a particular currency or basket of currencies and sold to investors in national capital market other than the country of issue (Sunil, 2012). It is targeted specifically at cross border distribution and belongs to the group of global bonds. An illustration is a US denominated …show more content…

A US dollar bond arrangement for a Nigerian bank does not need the SEC approval. These bonds have no record of ownership and easily transferable. It operates just like currency notes which makes it is easy to evade or avoid tax. Eurobond also Lacks regulatory interference, since companies do not have to adhere to strict regulations, the cost of issuing bonds is lower. Less stringent disclosure requirements is another characteristics of Eurobond. It makes it cheaper and less time consuming to offer Eurobonds than dollar-denominated bonds. It is also tax friendly as investors do not have to be disclosed thereby making it not compulsory to pay …show more content…

Multinational that generates profit globally will also find it convenient to pay the interest on the debt from the coffers of their subsidiary or branch. For the Nigerian fund manager that oversees and is interested in a pound denominated portfolio, he does not have to worry about the exchange rate difference when it comes to investing in an Apple debt. Eurobonds are mostly common when the issuer does not have a strong local debt market, or when the issuer's home currency is not attractive to investors (Wathen,

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