The external bond market refers to bond trading activity wherein the bonds are underwritten by an international syndicate, are offered in several countries simultaneously, are issued outside any country’s jurisdiction, and are not registered. The Eurobond market is a major external bond market. The external bond market combined with the internal bond market comprises the global bond market. Examples of an external bond are the “global bond,” issued by the World Bank, and Eurodollar bonds.

The External Bond Market comprises of the :

• Foreign Bond Market and
• Euro Bond Market

Foreign Bond: issue is one offered by a foreign borrower to the investors in a national capital market and denominated in that nations currency. An example is German MNC issuing dollar denominated bonds to the U.S. investors.

Euro Bond: issue is one denominated in a particular currency but sold to investors in national capital markets other than the country that issued the denominating currency. An example is a Dutch borrower issuing DM-denominated bonds to investors in the UK, Switzerland and the Netherlands.