#fixed #income
Bond Issuers may choose to issue in a foreign currency if they are expecting cash flows in the foreign currency because the interest payments and principal repayments can act as a natural hedge, reducing currency risk.
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Currency Denomination bondsors. For this reason, borrowers in developing countries often elect to issue bonds in a currency other than their local currency, such as in euros or US dollars, because doing so makes it easier to place the bond with international investors. <span>Issuers may also choose to issue in a foreign currency if they are expecting cash flows in the foreign currency because the interest payments and principal repayments can act as a natural hedge, reducing currency risk. If a bond is aimed solely at a country’s domestic investors, it is more likely that the borrower will issue in the local currency.
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