EUROBOND

CFI has defined a Eurobond as a fixed-income debt instrument (security) denominated in a different currency than the local one of the countries where the bond is being issued. Eurobonds are bonds issued in a currency different from the issuer's country or market. Despite their name, they have no specific European connection. These bonds allow entities to raise funds in foreign currencies, making them 'external bonds.'

For example, a Eurobond denominated in U.S. dollars is called a Eurodollar bond. Similarly, a Eurobond denominated in Chinese yuan is a Euro-yuan bond. A Russian company could issue a Eurodollar bond in Canada, and an international syndicate might issue Euroyen bonds in Nigeria.

Eurobonds are popular among private organizations, international syndicates, and governments seeking foreign-denominated funds. They typically offer fixed interest rates and are often long-term. The primary reason for issuing Eurobonds is the need for foreign currency capital. These bonds are generally inexpensive, have low face values, and are highly liquid, especially when denominated in a strong currency.