The disappearance of exchange controls and restriction of capital flows make the distinction between Eurobonds and other bonds less relevant. However, the distinction between Eurobonds and foreign bonds is important.

Foreign bond

A foreign bond is a bond issued in a domestic market for a foreign borrower. Foreign bonds tend to be more regulated than Eurobonds and are usually issued by a domestic group of banks.

External bonds

It is also important to notice that, strictly speaking, external bonds are neither foreign bonds nor Eurobonds. External bonds include foreign currency denominated domestic bonds, like the Japanese Shogun bonds, for example. They also include Eurodollars bonds, either issued by Japanese corporations (known as “Sushi bonds”) or with an embedded currency option (known as “Heaven and Hell” bonds).

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