This document provides information about bond markets. It defines key terms like international bonds, domestic bonds, Eurobonds, and foreign bonds. It discusses the different types of international bonds and how they are classified. It also outlines the common process for issuing bonds and describes some of the main instruments and risks associated with international bond markets. Various data on outstanding bond amounts by major instruments, issuers, currencies is presented. The advantages and disadvantages of international bonds for both companies and investors are summarized.

3. NAME ROLL NO.
Bhavik Parmar 28
Sonu Pethani 32
Harsh Sanghavi 34
Shashank Pai 26
Vaishali Rawal 36
Dharmik Patel 30
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4. WHAT IS 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.
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5. MEANING OF 'INTERNATIONAL BOND'
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.
INTERNATIONAL BOND IS FURTHER CLASSIFIED
IN THREE TYPES
1) Domestic Bond
2) Euro Bond
3) Foreign Bond

6. FEATURES OF INTERNATIONAL BOND
1) It is a debt market
2) It is a fund raising market
3) Fixed income instrument
4) Issued in foreign currency
5) It channelizing savings

7. THE COMMON PROCESS OF ISSUING BOND
Step 1:-A borrower will contact an investment banker.
Step 2:- The lead manager will invite other banks.
Step 3:-The managing group and banks will serve as underwriters for the
underwriter issues.
Step 4:-The various members of the underwriting syndicate receive a
portion of the spread.
Step 5:-The lead manager receives the full spread.

8. INSTRUMENTS OF
INTERNATIONAL BOND MARKET
1) Straight Fixed-Rate
2) Floating-Rate Note
3) Convertible Bond
4) Straight Fixed-rate with equity warrants
5) Zero coupon bond
6) Dual-Currency bond

9. RISK OF INVESTING IN BOND
1) Inflation Risk
2) Interest Rate Risk
3) Default Risk
4) Downgrade Risk
5) Liquidity Risk
6) Reinvestment Risk
7) Rip-off Risk

10. ADVANTAGES & DISADVANTAGES
OF INTERNATIONAL BOND
Advantages Disadvantages
Diversify your portfolio Outperformed by Mutual Funds
International fund raising  Fees
instrument
Risk
Fixed income market
Limited Selection
Investment avenue(short term as
well as long term)

11. CHARACTERISTICS OF INTERNATIONAL
BOND MARKET INSTRUMENTS
Instruments Frequency of Size of Interest Pay off at
Interest payment payment Maturity
Straight Fixed-Rate Annual Fixed Currency of issue
Floating-Rate Note Quarterly or Semi- Variable Currency of issue
annual
Convertible Bond Annual Fixed Currency of issue or
conversion to equity
share
Straight Fixed-rate Annual Fixed Currency of issue
with equity warrants plus equity shares
from exercised
warrants
Zero coupon bond None Zero Currency of issue
Dual-Currency bond Annual Fixed Dual currency
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12. INTERNATIONAL BOND AMOUNTS
OUTSTANDING BY MAJOR INSTRUMENTS
INSTRUMENTS Dec. 2008 Dec. 2009 March 2010
Straight fixed-rate 14428.4 17274.2 17235.9
Floating-rate note 7892.0 8357.2 7988.8
Straight fixed-rate with equity 396.7 447.2 446.1
warrants
Total 22717.1 26078.6 25670.8
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13. INTERNATIONAL BOND AMOUNTS
OUTSTANDING BY MAJOR ISSURES
ISSURES Dec. 2008 Dec. 2009 March 2010
Financial Institutions 17,925.70 20,030.10 19,531.10
Governments 1,794.60 2,232.20 2,254.40
International Organizations 637.90 791.50 814.10
Corporate Issuers 2,359.00 3,024.70 3,071.20
Total 22717.20 26078.50 25670.80
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14. INTERNATIONAL BOND AMOUNTS
OUTSTANDING BY MAJOR CURRENCIES
CURRENCIES Dec. 2008 Dec. 2009 March 2010
Euro 10873.9 12387.6 11813.8
US Dollar 8215.1 9429.0 9718.1
Pound Sterling 1701.8 2145.5 2028.3
Yen 746.7 693.9 668.7
Other 1179.7 1422.5 1441.9
Total 22717.2 26078.5 25670.8
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15. WHAT IS DOMESTIC BOND
Bonds help acquire orders and, in many cases, are a precondition for
successful conclusion of a contract.
For all entrepreneurs planning to enter tenders and conclude
contracts for the delivery of goods or services we offer a wide range
of domestic contract bonds.
MEANING OF DOMESTIC BOND
Bonds issued in the country and currency in which they are traded.
Unlike international bonds, domestic bonds are not subject
to currency risk. They usually carry less risk, as the regulatory and
taxation requirements are usually known to investors in domestic
bonds, or at least to their brokers and accountants.

16. TYPES OF DOMESTIC BOND
Public Sector Undertaking Bonds
Corporate Bonds
Financial Institutions and Banks
Emerging Bond Markets
Tax-Savings Bonds

17. WHAT IS EUROBOND ?
A euro bond is a debt contract between a borrower and an
investor, which records the borrower's obligation to pay interest
and the principal amount of the bond on specified dates.
For -A firm issuing Yen bonds outside Japan . When a
Japanese firm issues yen bonds in the Euro market.

18. THE PROCEDURE FOR THE EUROBOND
1) Select a Lead Manager:- The borrower chooses one investment bank
to be the lead manager of the bond issue.
1) Organize a Syndicate:- The lead manager negotiates with other banks
to form managing group. This group then negotiates the terms of the
bond issue with the borrower.
2) Selling the Bonds:-Once the syndicate is formed and the terms of the
issue are agreed upon, the managing group buys the bonds from the
borrower. The managing group then sells the euro bonds to the
underwriters.
3) Principal Paying Agent:-A agent or trustee may also be appointed by
the borrower to handle the paperwork and legal aspects of the euro
bond issue and act as principal agent.

19. UNIQUE CHARACTERISTICS OF
EUROBOND
1) Coupon (The Interest Rate)
2) Maturity
3) Issuer
4) Secondary Market
5) Ratings
6) Taxation
7) A Eurobond is only for Medium and Long-term

20. ADVANTAGES & DISADVANTAGES FOR
COMPANIES TO ISSUE EUROBONDS
Advantages Disadvantages
Large amounts There are issue costs to take
into account.
Freedom and Flexibility
If the debt is not matched firm
Lower cost of issue
may have to be open to foreign
exchange risk.
Lower interest cost
Longer maturities

21. ADVANTAGES & DISADVANTAGES FOR
INVESTOR TO ISSUE EUROBONDS
Advantages Disadvantages
Tax free income Not a good idea for investors who
may need a repayment.
Low Risk investment
Convertible to Equity
There is always the risk defaulter.
Liquid investment

22. INTRODUCTUON ON FOREIGN BOND
Foreign bonds are regulated by the domestic market authorities and are
usually given nicknames that refer to the domestic market in which they
are being offered.
A foreign bond allows an investor a measure of international
diversification without subjection to the risk of changes in relative
currency values.

23. DISTINCTION
Foreign Bond market Euro Bond market
-Foreign government or -Any borrower with credit
corporation or international standing explicit rating rate
institution US-SEC-Register
-Any widely used by
-Local currency international country
- -
Typically US $50-500 Millions Typically US $50-500 Millions
-Bearer expect , in Bulldog and -Bearer
Yankee markets
-Annual for fixed
-As in rate bond and quarterly for FRN’s
corresponding domestic market
-Usually London Luxembourg
-Foreign stock exchange
-Wide international profile.
-Domestic and overseas Private individual play a major role

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