This chapter focuses on ways of raising money by selling bonds outside of the issuer's home currency.
This may be done by issuing bonds in another country under the regulatory constraints of that country (foreign bonds) or may be done outside of the jurisdiction of any country, with no interference from national regulators or tax authorities (Eurobonds).
It may also be done by setting up an ongoing programme of issuance of a number of medium-term bonds/notes through an arrangement with an investment bank(s) acting as a manager helping the sale of bonds every few weeks in the amounts, currency and type that suit the borrower at that time. Finally, the chapter discusses the principles behind the rapidly growing market in Islamic bonds; still less than 30 years old, this market is now worth well over $230 billion.International bonds are government (sovereign) or corporate bonds issued in a country or a currency foreign to the investor. The amount outstanding in the international bond markets was over $20 trillion in 2014, in a variety of currency denominations. International bonds fall into two main categories.
• Foreign bonds are issued in the domestic currency of the country where the bond is issued by a non-resident, and are usually given a name that relates to the country of the currency of issue, e.g. Samurai bonds are issued in Japan in yen by a non-resident issuer.
• Eurobonds are bonds issued outside the jurisdiction of the currency of issue, e.g. a Eurodollar bond is issued outside the US and so the US authorities have no control over this market.
The different types of bonds are outlined in Table 7.1.
The term global bond is used where bonds are issued simultaneously in different countries by large companies trading internationally or by sovereign entities. These may be issued and traded in the foreign bond markets of one or more countries, and/or the Eurobond market, and/or in the domestic market of the issuer. Thus, they may be issued and trade in many different currencies.
Table 7.1 The attributes of the different types of bonds
| Type of bond | Currency of issue | Nationality of issuer | Place of issue | Primary investors |
| Domestic bond | Domestic | Domestic | Domestic | Domestic |
| Foreign bond Bulldog, Yankee, Panda, etc. | Domestic | Foreign | Domestic | Domestic |
| Eurobond | Eurocurrency Euroyen Eurodollars, Eurosterling, etc. | Any | International | International |
The majority of international bonds are issued in US dollars or euros, with the euro now having overtaken the dollar - of all the international bonds outstanding 45% are denominated in euros and 36% in dollars. Note that most of those denominated in euros are not under the jurisdiction of any eurozone country (they are Eurobonds), with most of their trading taking place in financial centres outside of the continent, such as London. While only 9% of international bonds are issued in sterling, London is the major centre for secondary trading, responsible for more than 70% of Eurobond trades.