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A foreign bond is a debt security issued by a foreign company or government in the domestic market of another country, denominated in that country's local currency, and subject to that country's regulations. A Japanese company selling bonds in the United States denominated in U.S. dollars is issuing a foreign bond. These bonds carry traditional nicknames: bonds sold in the United States by foreign issuers are called Yankee bonds, in the United Kingdom they are Bulldog bonds, in Japan they are Samurai bonds, and in Switzerland they are Chocolate bonds.
Borrowing in another country's domestic market serves several strategic purposes that cannot be replicated by staying home.
These two categories are frequently confused because both involve borrowing across borders.
| Foreign Bond | Eurobond | |
|---|---|---|
| Where Issued | Domestic market of a single foreign country | International market, simultaneously in multiple countries |
| Currency | Local currency of the host country | Often different from the issuer's home currency |
| Regulation | Subject to host country securities law | Less regulated; governed by international market conventions |
| Example | Japanese firm issuing USD bonds in the U.S. market | U.S. firm issuing EUR bonds across European markets simultaneously |
When you issue bonds in a foreign currency, you take on exchange rate exposure. A Japanese company issuing $500 million in Yankee bonds must repay $500 million plus interest regardless of how the yen-dollar rate moves. If the yen depreciates, repayment becomes more expensive in yen terms.
Issuers typically hedge this exposure using cross-currency swaps that convert the foreign currency debt service back into their home currency. The all-in cost after the swap is what determines whether the foreign bond issuance was genuinely cheaper than a domestic offering.
With deep roots in traditional finance and the digital asset industry, Acquire.Fi operates as a specialist M&A advisory firm. Coverage spans M&A, secondaries, OTC, and capital markets advisory across digital assets and frontier tech. Our team has decades of combined experience across every stage of the deal lifecycle.
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