Bulldog Bond
A bulldog bond is a type of foreign bond issued by non-British corporations seeking to raise capital in pound-sterling (GBP) from British investors. A bulldog bond is a type of foreign bond issued by non-British corporations seeking to raise capital in pound-sterling (GBP) from British investors. A bulldog bond is a type of foreign bond issued by non-British corporations seeking to raise capital in pound-sterling from British investors. A bulldog bond is a type of foreign bond issued by non-British corporations seeking to raise capital in pound-sterling from British investors. Simply put, a foreign bond is a bond issued in a domestic market by a foreign entity in the domestic market's currency as a means of raising capital.
What is Bulldog Bond?
A bulldog bond is a type of foreign bond issued by non-British corporations seeking to raise capital in pound-sterling (GBP) from British investors.
Understanding Bulldog Bond
A company may choose to enter a foreign market if it believes that it would get attractive interest rates in this market or if it has need for the foreign currency. When a company decides to tap into a foreign market, it can do so by issuing foreign bonds, which are bonds denominated in the currency of the intended market. Simply put, a foreign bond is a bond issued in a domestic market by a foreign entity in the domestic market's currency as a means of raising capital. Foreign bonds are mainly used to provide issuers with access to another capital market outside of their own to raise funds.
A bulldog bond is a type of foreign bond issued by non-British corporations seeking to raise capital in pound-sterling from British investors. For example, a Canadian company looking to access investment capital in the U.K. bond market may opt to issue a bulldog bond. If the related expenses (debt) are also in British pounds, and the revenue can offset them, then the exchange rate risk is decreased.
These pound denominated bonds are referred to as bulldog bonds given that the British bulldog is a national icon of England. According to the Bank for International Settlements, GBP is ranked fourth globally in both the most traded currency and reserve currency categories after the U.S. Dollar (USD), Euro (EUR), and the Japanese Yen (JPY).
Bulldog Bond Characteristics
Related terms:
Bond : Understanding What a Bond Is
A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. read more
Bond Market
The bond market is the collective name given to all trades and issues of debt securities. Learn more about corporate, government, and municipal bonds. read more
Cost of Debt & How to Calculate
Cost of debt is the effective rate that a company pays on its current debt as part of its capital structure. read more
Currency
Currency is a generally accepted form of payment, including coins and paper notes, which is circulated within an economy and usually issued by a government. read more
Dollar Bond
A dollar bond is a U.S. denominated bond that trades outside of the U.S. and both the principal and any coupon payments are paid in U.S. dollars. read more
Euro
The European Economic and Monetary Union is comprised of 27 member nations, 19 of whom have adopted the euro (EUR) as their official currency. read more
Fixed Income & Examples
Fixed income refers to assets and securities that bear fixed cash flows for investors, such as fixed rate interest or dividends. read more
Foreign Bond
A foreign bond is a bond that is issued in a domestic market by a foreign entity, in the domestic market's currency. read more
Foreign Exchange Risk
Foreign exchange risk refers to the losses that an international financial transaction may incur due to currency fluctuations. read more