Eurobond

Euro bonds are bonds of medium and long duration, for the international capital market ( Euro market ) are placed and are issued by a country other than the country of origin of the currency in which they are placed. The term Euro Bond has no connection with the common European currency Euro.

The emission is usually in the form of bearer bonds by international banking syndicates; dominant bond currencies are the U.S. $, Yen, Swiss Franc, Pound Sterling and Euro. Debtors are private companies with high credit ratings, states, inter alia, public entities and supranational institutions.

The Euro Bonds include both conventional floating rate bonds, zero coupon bonds, dual currency bonds and convertible bonds.

The introduction of euro bonds may be partly due to the introduced in 1963 in the U.S. Interest Equalization Tax ( IET) return result, investors should hold in the United States from investing in foreign bonds by foreign interest income were charged a withholding tax. Be advantageous for issuers, mostly large multinational companies such as McDonald's, Nestle or Volkswagen, the relatively low registration obligations and the ability to finance projects in the currency in which they are implemented, and thus to reduce the currency risk prove. The first Euro Bond was listed in 1963 on the Luxembourg Stock Exchange, was a bond with an issue volume of U.S. $ 15 million and five ten-year term of the Autostrada ( concessioni e Costruzioni Autostrade SpA ) for financing the Italian motorway network.