International bond markets are vital for global finance, connecting issuers and investors across borders. These markets consist of primary and secondary segments, involving various participants like governments, corporations, and financial intermediaries.
Different types of international bonds cater to diverse needs. , , and each serve unique purposes, allowing issuers to tap into multiple markets and currencies while navigating regulatory landscapes.
International Bond Markets Structure and Types
Structure of international bond markets
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Primary market facilitates initial bond issuance directly from issuers to investors raising capital for governments and corporations
Secondary market enables trading of previously issued bonds through OTC transactions and electronic platforms enhancing liquidity
Market participants include issuers (governments, corporations), investors (institutional, retail), and intermediaries (, brokers) facilitating transactions
Markets perform capital raising, offer investment opportunities, and enable price discovery fostering efficient allocation of resources
Types of international bonds
Eurobonds issued outside domestic market of currency denomination avoid national regulations often in multiple tranches (USD Eurobond issued in London)
Foreign bonds issued in domestic market by foreign entities subject to local regulations ( in US, in Japan)
Global bonds issued simultaneously in multiple markets by large multinationals or sovereigns registered with multiple regulatory bodies (World Bank global bond issue)
Bond issuance in international markets
Issuance process involves:
Pre-launch preparation
Marketing and book-building
Pricing and allocation
Settlement and listing
Underwriters structure offerings, manage syndicates, conduct due diligence, price and distribute bonds