Classification of bond confusion

CFA Level I Fixed Income
#1

Dear all,

Can someone help in the following classification of hypothetical bonds below into (Domestic, Foreign or Euro-bond)

  1. Singapore firm issue bond in Singapore denominated in SGD
  2. Singapore firm isse bond in Singapore denominated in HKD
  3. Singapore firm isse bond in Hong Kong denominated in HKD
  4. Singapore firm issue bond in Hong Kong denominated in SGD

I think for case 1 it will be straightforward - domestic bond

For case 2, is it a eurobond?

For case 3, can it qualify as a foreign bond?

And for case 4 it is eurobond?

Does the origin of the firm plays a pivotal role in identifiying the correct classification? In my opinion, both the orgin of the firm as well as the market in which bond are sold are important factors of consideration when classifying them.

Thanks in advance :slight_smile:

Cheers,

Ernest

#2

anyone to share? :slight_smile:

#3
  1. Domestic bond.
  2. Eurobond
  3. Foreign bond
  4. Eurobond, foreign bond

To be a eurobond, the currency of the bond has to be different from the currency of the country/economy in which it is issued; the location of the issuer doesn’t matter.

I’d classify 3 and 4 as foreign bonds because they’re issued by a company in a foreign country: therefore, a company that faces economic circumstances different from those in the domestic economy.