Types of international bonds

International bonds are classified according to different standards. There are many different types. For example, according to the issuing entity, they can be divided into government bonds, corporate bonds and financial bonds; According to the classification, it can be divided into public bonds and private bonds; according to the issuing market and face value currency, it can be divided into foreign bonds and European bonds. This classification method is relatively common, and we will introduce it in detail here.

Foreign bonds

Foreign bonds are issued by borrowers in foreign securities markets in the currency of that country. Face value bonds. Foreign bonds are a traditional international bond. During the industrial revolution, capitalist companies issued bonds to raise funds to expand reproduction. Since World War II, foreign bonds have further strengthened their role and become the most important credit instrument for raising long-term capital.

The characteristics of foreign bonds are that the bond issuer is in one country, and the bond's face value currency and issuance market belong to another country. Countries that issue foreign bonds include both developed countries, such as the United States, Japan, France, etc., and developing countries, such as Brazil, China, etc. For example, the yen bonds issued by China National Trust and Investment Corporation in Japan are foreign bonds.

When issuing foreign bonds, the requirements for the issuing country are relatively high. In order for bonds to be issued smoothly and funds to be raised quickly, the issuing country is generally required to meet the following conditions: first, the country's political situation is relatively stable and its legal system is relatively sound; second, the country's securities market is active and the capital market has sufficient funds; Third, the country’s currency credibility is relatively high. Therefore, there are not many countries selected as the issuance sites of foreign bonds, mainly the United States, Japan, Germany, Switzerland, etc. Then, foreign bonds can be divided into U.S. dollar bonds, Japanese yen bonds, ** mark bonds, and Swiss franc bonds according to their face value currencies. Before the mid-1970s, U.S. dollar bonds always occupied the leading position in the field of foreign bond issuance. In 1976, US dollar bonds were twice as large as Swiss franc bonds, but by 1979 the total issuance value of the latter was more than twice the total issuance value of the former. Judging from the development trend, the status of US dollar bonds has declined, while the total issuance value of Swiss franc bonds is increasing rapidly, and Japanese yen bonds are also on the rise.

Eurobonds

Eurobonds are issued by borrowers on capital markets outside their home countries An international bond with a face value in the currency of a third country (European currency). It is characterized by bond issuanceThe person, the bond issuance market, and the face value of the bond belong to three different countries respectively. Specifically, the bond issuer is in one country, the bond is issued in the financial market of another country, and the currency used in the face value of the bond is that of a third country. . For example, the U.S. dollar bonds issued by Bank of China in London are Eurobonds. Different from foreign bonds, Eurobonds can be converted into par value, and their issuance is not subject to the financial regulations of various countries. The controls are looser and the review is not strict. The fundraiser can freely choose a harder European currency as the par value currency. ; The issuance fees in the European bond market are low, there are no registration fees for bond issuance, and bond holders do not pay interest taxes; the interest rates of European bonds are preferential to bank interest rates, generally fixed interest rates, but floating rate bonds are also increasing, and the interest rate levels of bonds It varies in different periods, different currency units, and different issuing units.