eurobond

eurobond A bond issued in a eurocurrency, which is now one of the largest markets for raising money (it is much larger than the UK stock exchange). The reason for the popularity of the eurobond market is that secondary market investors can remain anonymous, usually for the purpose of avoiding tax. For this reason it is difficult to ascertain the exact size and scope of operation of the market. Issues of new eurobonds normally take place in London, largely through syndicates of US and Japanese investment banks; they are bearer securities, unlike the shares registered in most stock exchanges, and interest payments are free of any withholding taxes. There are various kinds of eurobonds. An ordinary bond, called a straight, is a fixed-interest loan of 3 to 8 years duration; others include floating-rate notes, which carry a variable interest rate based on the London Inter Bank Offered Rate; and perpetuals, which are never redeemed. Some carry warrants and some are convertible.