What is an 'Eurodollar Bond'

An Eurodollar bond is a U.S.-dollar denominated bond issued by an overseas company and held in a foreign institution outside both the U.S. and the issuer's home nation. Eurodollar bonds are an important source of capital for multinational companies and foreign governments.

A eurodollar bond is a type of Eurobond.

BREAKING DOWN 'Eurodollar Bond'

Don't let the name confuse you! Although the eurodollar originated in London, the name today refers only to the history, not the currency.

For example, if a Chinese bank held dollar-denominated bonds issued by a Japanese company, this would be considered a eurodollar bond.

Eurodollar bonds are advantageous because they are subject to fewer regulatory restrictions. They are not registered with the United States' Securities and Exchange Commission and can be sold at lower interest rates than in the U.S.

RELATED TERMS
  1. Ted Spread

    The price difference between three-month futures contracts for ...
  2. Eurobond

    A bond issued in a currency other than the currency of the country ...
  3. Foreign Bond

    A bond that is issued in a domestic market by a foreign entity, ...
  4. Bond Yield

    The amount of return an investor will realize on a bond. Several ...
  5. U.S. Savings Bonds

    A U.S. savings bond is a government bond that offers a fixed ...
  6. International Bond

    Debt investments that are issued in a country by a non-domestic ...
Related Articles
  1. Trading

    Introduction To Trading Eurodollar Futures

    Introduction to trading eurodollar futures, covering eurodollar time deposits, the history of eurodollars, hedging and speculating with eurodollar futures.
  2. Investing

    How Exchange Risk Affects Foreign Bonds

    Investors include foreign bonds in their portfolios to take advantage of higher interest rates or yields, and to diversify their holdings. However, the higher return expected from investing in ...
  3. Investing

    Corporate Bond Basics: Learn to Invest

    Understand the basics of corporate bonds to increase your chances of positive returns.
  4. Investing

    The Basics Of Bonds

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

    U.S. Corporate Bonds: The Last Safe Place to Make Money

    There aren't many other sources right now for relatively safe, steady income.
  6. Financial Advisor

    Advising FAs: Explaining Bonds to a Client

    Most of us have borrowed money at some point in our lives, and just as people need money, so do companies and governments. Companies need funds to expand into new markets, while governments need ...
  7. Investing

    Surprise! The Best Long-term Bond Investment May Be Savings Bonds

    A 20-year Series EE savings bond pays more interest than a 20-year Treasury bond. So are government-issued long-term bonds the best bet going?
Hot Definitions
  1. Covariance

    A measure of the degree to which returns on two risky assets move in tandem. A positive covariance means that asset returns ...
  2. Liquid Asset

    An asset that can be converted into cash quickly and with minimal impact to the price received. Liquid assets are generally ...
  3. Nostro Account

    A bank account held in a foreign country by a domestic bank, denominated in the currency of that country. Nostro accounts ...
  4. Retirement Planning

    Retirement planning is the process of determining retirement income goals and the actions and decisions necessary to achieve ...
  5. Drawdown

    The peak-to-trough decline during a specific record period of an investment, fund or commodity. A drawdown is usually quoted ...
  6. Inverse Transaction

    A transaction that can cancel out a forward contract that has the same value date.
Trading Center