Exam 12: International Bond Market

A disproportionate share of Eurobonds have high credit ratings in comparison to domestic and foreign bonds. (Approximately 40 percent of Eurobond issues are rated AAA and 30 percent are AA). Explanations for this include

The withholding tax on bond income was originally called the interest equalization tax.

Proportionately more domestic bonds than international bonds are denominated in the ______ and the ______ while more international bonds than domestic bonds are denominated in the _________ and the ________.

Unlike a bond issue, in which the entire issue is brought to market at once, _______ is partially sold on a continuous basis through an issuance facility that allows the borrower to obtain funds only as needed on a flexible basis.

When the bond sells at par, the implicit SF/$ exchange rate at maturity of a Swiss franc/U.S. dollar dual currency bonds that pay $581.40 at maturity per SF1,000, is

Your firm has just issued five-year floating-rate notes indexed to six-month U.S. dollar LIBOR plus 1/4 percent. What is the amount of the first coupon payment your firm will pay per U.S. $1,000 of face value, if six-month LIBOR is currently 7.2 percent?

With regard to dual-currency bonds versus comparable straight fixed-rate bonds,

"Bulldog" bonds are

"Samurai" bonds are

One unintended consequence of Sarbanes-Oxley

Floating-rate notes (FRN)

A bond market index

A 1-year, 4 percent euro denominated bond sells at par. A comparable risk 1-year, 5.5 percent euro/dollar dual-currency bond pays $1,500 at maturity per €1,000 of face value. It sells for €1,250. What is the implied $/€ exchange rate at maturity?

Securities sold in the United States to public investors must be registered with the SEC, and a prospectus disclosing detailed financial information about the issuer must be provided and made available to prospective investors. This encourages foreign borrowers wishing to raise U.S. dollars to use

"Dragon" bonds are

In any year, the Eurobond segment of the international bond market accounts for approximately what percent of new bond offering?

Market makers in the secondary bond market

U.S. corporations

Publicly traded Yankee bonds must

True or false: floating rate notes behave differently in response to interest rate risk than straight fixed-rate bonds.