The document discusses international bond markets. It defines different types of international bonds including Eurobonds, foreign bonds, and global bonds. Eurobonds are issued outside a currency's home country, foreign bonds are issued domestically but in a foreign currency, and global bonds are issued simultaneously in multiple countries. The key instruments in international bond markets are corporate bonds, government bonds, zero-coupon bonds, convertible bonds, and floating rate notes. International bonds allow entities to raise funds across borders and currencies.

1. International Bond Market
Akbar Ali K
Dept of commerce
Pondicherry University

2. Bond Market
The bond market is a financial market where participants buy and sell
debt securities , usually in the form of bonds.
The bond market primarily includes:-
I) Government-issued securities.
II) Corporate debt securities.

3. International Bond Market
• An international bond is a debt investment that is issued in a country by a
non domestic entity.
• A bond issued in a country or currency other than that of the investor or
broker. They include Eurobonds, which are issued in a foreign currency,
foreign bonds, which are issued by a foreign government or corporation in
the domestic market, and global bonds, which are issued in both domestic
and international markets.

4. International bond is further classified in three types:
Euro Bond
• A bond issued in a currency other than the currency of the country or
market in which it is issued. Example: Japanese firm issuing yen
bonds in the Euro market.
• The term Eurobond refers only to the fact the bond is issued outside of
the borders of the currency's home country; it does not mean the bond
was issued in Europe or denominated in the euro currency.

5. Foreign Bond
• A bond that is issued in a domestic market by a foreign entity, in the
domestic market's currency. Example: A German MNC issuing dollar-
denominated bonds to U.S. investors.
• A foreign bond is most often issued by a foreign firm to raise capital in
a domestic market that would be most interested in purchasing the
firm's debt.
• For foreign firms doing a large amount of business in the domestic
market, issuing foreign bonds is a common practice.

6. Global Bond
• A global bond is a bond which is issued in several countries at the
same time.
• It is typically issued by a large multinational corporation or sovereign
entity with a high credit rating.
• Global bonds are issued in different currencies and distributed in the
currency of the country where it is issued. For example, a global bond
issued in the United States will be in US Dollars (USD), while a
global bond issued in the Netherlands will be in euros.

7. Features of international bond
• It is a debt market.
• It is a fund raising market.
• Fixed income instrument.
• Issued in foreign currency.
• It channelizing savings.

8. Instruments of international bond market
Corporate Bond
• A corporate bond is a bond issue by a corporation. It is a bond that a
corporation issues to raise money effectively in order to expand its
business.
• The term is usually applied to longer-term debt instruments, generally
with a maturity date falling at least a year after their issue date.

9. Government Bond
• A government bond is a bond issued by a national government,
generally promising to pay a certain amount (the face value) on a
certain date, as well as periodic interest payments.
• Government bonds are usually denominated in the country's own
currency. Bonds issued by national governments in foreign
currencies are normally referred to as sovereign bonds, although
the term "sovereign bond" may also refer to bonds issued in a
country's own currency.

10. Zero-Coupon Bonds
• This is a type of bond that makes no coupon payments but instead is
issued at a considerable discount to par value. For example, lets say a
zero-coupon bond with a $1,000 par value and 10 years to maturity is
trading at $600; you'd be paying $600 today for a bond that will be
worth $1,000 in 10 years.
• The issue price of Zero Coupon Bonds is inversely related to their
maturity period, i.e. longer the maturity period lesser would be the issue
price and vice-versa. These types of bonds are also known as Deep
Discount Bonds.

11. Convertible Bonds
• The holder of a convertible bond has the option to convert the bond
into equity (in the same value as of the bond) of the issuing firm
(borrowing firm) on prespecified terms.
• Convertible bonds may be fully or partly convertible. For the part of
the convertible bond which is redeemed, the investor receives equity
shares and the non-converted part remains as a bond.

12. Floating Rate Notes
• Floating Rate Notes are bonds in which interest rate depends on the
interest rate prevailing in the market.
• The interest rate paid to the bondholder at regular intervals comprises
of the interest rate prevailing in the market and ‘spread’, which is a
rate that is fixed when the prices of the bond are being fixed and it
remains constant till the maturity period of the bond.

13. Thank You