• Global Frameworks: CFA Level 2 (Fixed Income / Corporate Issuers).

1. Accessing Global Debt Capital Markets
Multinational corporations lower their total cost of capital by issuing debt securities in international markets that offer the lowest interest rates or deepest investor liquidity.
  • Eurobonds: Bonds denominated in a currency other than the local currency of the country where they are issued (e.g., a USD-denominated bond issued in London by a Japanese corporation). Eurobonds face less regulatory oversight because they are typically issued in bearer form and bypass local registration requirements.
  • Foreign Bonds: Bonds issued by a foreign entity in a domestic market, denominated in that market’s local currency, and subject to local securities regulations (e.g., Yankee Bonds in the US, Samurai Bonds in Japan, or Bulldog Bonds in the UK).

2. Cross-Border Equity Listings: American Depositary Receipts (ADRs)
To attract US equity investors without undergoing a full US exchange listing, foreign corporations issue American Depositary Receipts (ADRs).
An ADR is a negotiable certificate issued by a US depositary bank that represents a specific number of shares in a foreign stock. The underlying shares are held by a custodian bank in the company’s home country. ADRs trade on US exchanges in US Dollars and pay dividends in USD, making it easier for domestic investors to diversify globally without handling international execution or currency conversion.
 
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