DEFINITION of 'Sushi Bond'

A bond issued by a Japanese issuer in a market outside Japan and denominated in a currency other than the yen. Sushi bonds are especially popular with Japanese institutional investors, since these bonds do not count toward regulatory limits on foreign securities holdings. A sushi bond is essentially a colloquial term for a eurobond from a Japanese issuer.

BREAKING DOWN 'Sushi Bond'

A Japanese company may seek to issue sushi bonds for a number of reasons: to capitalize on new investment opportunities, access cheaper funding alternatives or refinance foreign currency liabilities. Japanese institutions that wish to add an element of currency diversification to their bond portfolios are logical buyers for sushi bonds.

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