Eurobond
The prefix 'Euro' does not mean the bond must be denominated in euros or issued by a European company. The currency, issue market and distribution structure matter; the issuer's home country alone is not enough to classify the bond. Eurobond markets can widen funding access and currency choice, but borrowers must assess currency exposure, investor demand, issue costs and contractual requirements. Distinguish a foreign bond issued in a domestic market in that market's currency. Exact market terminology and legal treatment should be checked for the transaction.
Worked example
A dollar bond distributed internationally outside the US domestic bond market can be a Eurodollar bond even if the issuer is based in Asia. A UK issuer selling dollars in the US domestic market is not classified as a Eurobond simply because the issuer is British.
Common mistake
Assuming every Eurobond is denominated in euros, or defining the category only by the issuer's nationality.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AFM | Supporting | September 2026–June 2027 |
| ACCA | FM | Direct | September 2026–June 2027 |