A bulldog bond is a type of debt security that is issued in the United Kingdom by a non-U.K. company. The name "bulldog bond" is derived from the fact that these bonds were first issued by the London-based banking firm of Baring Brothers in the early 1900s. Bulldog bonds are also sometimes referred to as "foreign currency bonds."
Bulldog bonds are typically issued in pounds sterling, but can also be issued in other currencies, such as the U.S. dollar or the euro. The issuer of a bulldog bond is typically a company that is looking to raise capital in the U.K. market, but does not have a U.K. subsidiaries. As such, the issuer will typically have its primary operations and assets located outside of the U.K.
Bulldog bonds are typically structured as fixed-rate bonds, which means that the interest rate on the bond is fixed for the life of the bond. The term of a bulldog bond can vary, but is typically between three and five years.
Bulldog bonds are typically issued in denominations of £1,000. They are typically listed on the London Stock Exchange and can be traded through most brokers.
What happens when a country buys bonds?
When a country buys bonds, it is effectively lending money to the issuer of the bonds. The country will receive periodic interest payments from the issuer, and will be repaid the principal amount of the loan at maturity. The terms of the bond (including interest rate, maturity date, and principal amount) will be specified in the bond contract.
What is Euro bond and foreign bond?
A Euro bond is a bond that is issued by a company or organization in a currency other than that of the issuer's home country. For example, a company based in the United States may issue a bond in Euros. Foreign bonds are similar to Euro bonds, but are issued in the currency of the issuer's home country. For example, a company based in the United Kingdom may issue a bond in British pounds.
How much are UK gilts? UK gilts are fixed income securities issued by the British government. They are typically issued with maturities of 5, 10, or 20 years. Gilts are traded on the London Stock Exchange and are denominated in pounds sterling.
As of December 2017, the yield on 5-year UK gilts was 1.21%, the yield on 10-year gilts was 1.40%, and the yield on 20-year gilts was 1.68%. What is a floating rate coupon? A floating rate coupon is a coupon that pays interest at a variable rate. The rate is usually based on a reference rate, such as LIBOR, and is reset at regular intervals, typically every three months. What are the advantages of foreign bonds? The advantage of foreign bonds is that they offer investors the potential for higher returns than domestic bonds. This is because foreign bonds are generally less risky than domestic bonds. For example, foreign bonds are less likely to default than domestic bonds. In addition, foreign bonds offer investors the opportunity to diversify their portfolios. This is because foreign bonds tend to be uncorrelated with domestic bonds. This means that they can help reduce the overall risk of a portfolio.