They give bondholders the right to choose the currency in which they want to receive interest payments and principal repayments. Bondholders can select one of two currencies for each payment.
So You have 4 options of receiving the payments or just 2?
Lets suppose the options are Dollar/Euro
Like I can
opt to receive principal in Dollar and the coupons in Dollar
opt to receive principal in Dollar and the coupons in Euro
opt to receive principal in Euro and the coupons in Euro
opt to receive principal in Euro and the coupons in Dollar
or I would need to choose one of them for both payments? (both dollar or both euro)
Got me.
I hunted about a bit, but didn’t find anything specific about whether or not all of the payments have to be in the same currency.
What prompted the question?
It`s because Dual Currency Bonds the coupon should be in one currency and the par value in another.
What prompted the question is that if a Currency Option Bond can only make both payments (par value and coupons) in one currency that you choose, it made them clearly different to Dual Currency Coupons, but the thing is I didnt find Currency Option Bonds very clear about its proprieties.
Also for the coupons all of them needs to be in the same currency or you could choose?
e.g. year 1 coupon in dollar, year 2 coupon in euro, etc