DEFINITION of 'Dollar Bond'

1. A U.S. denominated bond that trades outside of the United States. Along with the principal, any coupon payments from the bond are paid in U.S. funds.

2. A bond with a price that is quoted in dollars, rather than based on its yield to maturity.

BREAKING DOWN 'Dollar Bond'

1. Non-U.S. firms and governments will often issue bonds denominated in U.S. currency in a bid to attract U.S. investors and/or hedge currency risks. There is less currency risk on dollar bonds for U.S.-based investors looking to access international debt markets when compared to the purchase of non-U.S. denominated bonds.

2. For example, suppose that a 10-year bond has a current yield to maturity of 3.83% and a current price of $850. If this bond were quoted in terms of yield it would be quoted as 3.83% but if it were being quoted in dollar terms the bond would be quoted as $850.

RELATED TERMS
  1. Dollar Price

    The percentage of par, or face value, at which a bond is quoted. ...
  2. Bond Yield

    The amount of return an investor will realize on a bond. Several ...
  3. Bond

    A debt investment in which an investor loans money to an entity ...
  4. Bond Quote

    The price at which a bond is trading. A bond quote is typically ...
  5. Global Bond

    This type of bond can be traded in a domestic or European market. ...
  6. Discount Bond

    A bond that is issued for less than its par (or face) value, ...
Related Articles
  1. Managing Wealth

    How Bond Prices and Yields Work

    Understanding bond prices and yields can help any investor in any market.
  2. Investing

    An Introduction to Individual Bonds

    Individual bonds are better than bond funds and can be a key component to one’s investment strategy.
  3. Investing

    Find The Right Bond At The Right Time

    Find out which bonds you should be investing in and when you should be buying them.
  4. Investing

    5 Basic Things To Know About Bonds

    Learn these basic terms to breakdown this seemingly complex investment area.
  5. Investing

    Corporate Bonds: Advantages and Disadvantages

    Corporate bonds can provide compelling returns, even in low-yield environments. But they are not without risk.
  6. Investing

    The Basics Of Bonds

    Bonds play an important part in your portfolio as you age; learning about them makes good financial sense.
  7. Investing

    Comparing Yield To Maturity And The Coupon Rate

    Investors base investing decisions and strategies on yield to maturity more so than coupon rates.
  8. Financial Advisor

    Simple Math for Fixed-Coupon Corporate Bonds

    A guide to help to understand the simple math behind fixed-coupon corporate bonds.
RELATED FAQS
  1. Why is my bond worth less than face value?

    Find out how bonds can be issued or traded for less than their listed face values, and learn what causes bond prices to fluctuate ... Read Answer >>
  2. What causes a bond's price to rise?

    Learn about factors that influence the price of a bond, such as interest rate changes, credit rating, yield and overall market ... Read Answer >>
  3. Do long-term bonds have a greater interest rate risk than short-term bonds?

    There is a greater probability that interest rates will rise within a longer time period than within a shorter period. One ... Read Answer >>
  4. What determines the price of a bond in the open market?

    Learn more about some of the factors that influence the valuation of bonds on the open market, and why bond prices and yields ... Read Answer >>
Hot Definitions
  1. Money Market

    A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. ...
  2. Block (Bitcoin Block)

    Blocks are files where data pertaining to the Bitcoin network is permanently recorded.
  3. Fintech

    Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century.
  4. Ex-Dividend

    A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be ...
  5. Debt Security

    Any debt instrument that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount ...
  6. Taxable Income

    Taxable income is described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments ...
Trading Center