What Is an International Bond?

International bonds International bonds are bonds issued by a government, financial institution, business enterprise, or state organization in a foreign financial market with foreign currency as the par value in order to raise and finance funds. An important feature of international bonds is that issuers and investors belong to different countries, and the funds raised come from foreign financial markets. The issuance and trading of international bonds can be used to balance the balance of payments of the issuing country, and can also be used to introduce funds for development and production of the government or enterprise of the issuing country. Depending on the currency used to issue the bonds and the place of issue, international bonds can be divided into foreign bonds and European bonds.

International bonds

International bonds are bonds that are issued across borders and involve two or more countries. Compared with domestic bonds, they have certain characteristics.

International bonds can be divided into different categories from different perspectives. The main categories are selected as described below.

International

Generally speaking, the main purposes of countries using international bonds to raise funds are as follows:

1. To compensate the government of the issuing country

The procedures for issuing international bonds are as follows:

(1) The issuer determines the lead manager. After receiving the issuer's power of attorney, the lead manager begins work.

(2) The lead person helps the issuer to express its intention to issue bonds in the country where it is issued, and solicits the government's permission.

Relevant information

(3) The issuer and the leader agree on the basic conditions and drafting terms for issuing bonds.

(4) The issuer signs a subscription agreement with the manager.

(5) The manager signs an underwriting agreement with the underwriter, or signs a sales agreement with the salesperson.

(6) The issuer submits the prospectus, introduction and publicity bonds to the majority of investors through the underwriters.

(7) Bonds are issued to investors, that is, the underwriters sell the bonds to investors.