Eurobond (external bond)

A eurobond is an international bond that is denominated in a currency not native to the country where it is issued. They are also called external bonds.^[1] They are usually categorised according to the currency in which they are issued: eurodollar, euroyen, and so on. The name became somewhat misleading with the advent of the euro currency in 1999; eurobonds were created in the 1960s, before the euro existed, and thus the etymology is to "European bonds" rather than "bonds denominated in the Euro currency".

The eurobond market was traditionally centered in the City of London, with Luxembourg also being a primary listing center for these instruments.^[2] Eurobonds have since expanded and are traded throughout the world, with Singapore and Tokyo being notable markets as well. These bonds were originally created to escape regulation: by trading in US dollars in London, certain financial requirements of the US government unpopular with bankers could be evaded, and London was happy to welcome the business to grow their own finance sector. Since then, eurobonds have grown to be a more general way to perform financial operations in a currency while using the regulatory framework of a separate country.