Foreign bond - Gaisai (English spelling) external bond

Japanese: 外債 - がいさい（英語表記）external bond

Foreign bonds are bonds that are offered outside the issuer's own country, as opposed to domestic bonds that are offered within the issuer's own country. The issuance of foreign bonds is influenced by (1) the international long-term interest rate differential, (2) the supply and demand of funds in the lending and borrowing countries, (3) the long-term outlook for exchange rate fluctuations, (4) the political and economic stability of the borrowing country and borrowing companies, and (5) the tax system for foreign bonds. Foreign bonds can be classified using the example of Japan as follows: those issued in Japan by foreign governments and companies (non-residents) in yen (yen-denominated foreign bonds, or samurai bonds), and those issued in foreign currency by foreign governments and companies in the Japanese bond market (shogun bonds). The first yen-denominated foreign bonds, in which payments, interest payments, and redemptions are all made in yen, were issued by the Asian Development Bank in 1970 (Showa 45). Since they are yen-denominated, there is no exchange rate risk. Since then, there has been a rapid expansion in the scale of issuance, primarily by international financial institutions, foreign governments, local governments, and overseas private companies. The reasons for this include (1) no collateral is required, (2) the yield is determined by market trends, and (3) the redemption periods are diversified.

The first foreign currency bonds, in which the principal is paid in a currency other than the yen and redemption and interest are promised to be paid in a foreign currency, were issued in 1959 by the United States after World War II, and the first private bonds were issued in the United States in 1961. After that, from the late 1970s to the 1980s, the scale of issuance increased dramatically, mainly in Swiss franc and German mark bonds. The proportion of private bonds in particular has increased, and the reasons for this include (1) companies seeking low-cost funds both in domestic and overseas markets, (2) the ability to issue unsecured bonds, and (3) the importance of hedging exchange rate risk (issuing foreign bonds in the country where you hold foreign bonds for investment purposes to avoid the risk of exchange rate fluctuations) has become important as economic transactions become more international. Previously, there were three types of bonds that companies could use to raise funds through foreign bonds: straight bonds, convertible bonds, and bonds with stock acquisition rights (bonds with warrants), but the revised Commercial Code that came into effect on April 1, 2002 consolidated convertible bonds and bonds with stock acquisition rights (non-separable type) into bonds with stock acquisition rights. Of the bonds with stock acquisition rights, those that, when the stock acquisition rights are exercised, redeem the bond amount in lieu of the payment related to the exercise (equivalent to convertible bonds before the revision of the Commercial Code in April 2002) are called convertible bonds with stock acquisition rights.

Historically, foreign bond issuance began in the first half of the 19th century, and most of the issuance was made in the London financial market, since the UK was the only industrialized country at the time. From the second half of the 19th century, capital exports from developed countries were made in the form of underwriting foreign bonds, and after World War I, New York came to play a major role as a foreign bond issuing market. After World War II, New York continued to be the center of foreign bond issuance, but since the second half of the 1960s, European capital markets have gradually come to play a larger role in foreign bond issuance. In particular, with the European Monetary Union in 1999, the "Euro" was introduced as a new unit of currency calculation, and in 2002, banknotes and coins in euros were issued. As a result, the outstanding balance of eurobonds has been rapidly increasing in response to the development of the euro market.

[Shiro Hara and Osamu Kitai]

Source: Major foreign bonds

Foreign bonds are often given nicknames based on things that symbolize the country, such as representative animals or foods.

Arirang Bonds Korean won-denominated bonds issued in the Korean market. They are named after Arirang, a folk song representing the Korean Peninsula.

Kangaroo bonds: Bonds issued in Australian dollars by overseas companies that are non-resident in Australia to the Australian market.

Kimchi Bonds Non-Korean won denominated bonds issued in the Korean market.

Dim Sum Bonds Renminbi-denominated bonds issued in the Hong Kong market.

Dragon bonds are bonds issued in Hong Kong or Singapore for investors in East Asian and Southeast Asian countries such as Hong Kong, Taiwan and Singapore. They are often denominated in US dollars.

Panda bonds: Yuan-denominated bonds issued in the Chinese market.

Bulldog bonds are pound-denominated bonds issued in the UK market. The bulldog is a breed of dog created in the UK by crossbreeding to fight bulls, and is named after the nickname of Churchill, the British Prime Minister during World War II.

Maple bonds are bonds issued in Canadian dollars in the Canadian market. They are named after the maple leaf, which is a symbol of Canada and is also used on the national flag.

Yankee bonds: US dollar-denominated bonds issued in the US market.

[Editorial Department]

[Reference] | Bonds

Source: Shogakukan Encyclopedia Nipponica About Encyclopedia Nipponica Information | Legend

Japanese:

債券発行者の自国内で募集される内債に対して、債券発行者の自国外で募集される債券をいう。外債の発行は、(1)国際的長期金利格差、(2)貸付国・借入国の資金需給状態、(3)為替(かわせ)相場変動の長期的見通し、(4)借入国や借入企業の政治・経済的安定状態、(5)外債に対する税制、などによって左右される。外債の分類を、日本の事例で示すと、外国の政府・企業など（非居住者）が日本国内で円貨建てで発行するもの（円建て外債、またはサムライ債）と、外国の政府・企業などが日本の債券市場で、外貨建てで発行するもの（ショーグン債）とになる。払込み、利払い、償還のすべてが円貨建てで行われる円建て外債は、1970年（昭和45）に発行されたアジア開発銀行債が最初である。円建てなので為替リスクはない。その後、国際金融機関、外国の政府、地方公共団体、海外民間企業の発行を中心に急速な発行規模の拡大がみられつつある。その理由としては、(1)担保が不必要であること、(2)利回りが市場実勢で決まること、(3)償還期間の多様化、などがあげられる。

　円以外の通貨で元本を払い込み、外貨で償還金や利息を払うことを約束している外貨債は、第二次世界大戦後では1959年にアメリカで発行された国債が最初であり、民間債は1961年に同じくアメリカで発行されたのが初めてである。その後、1970年代後半から1980年代にかけてスイス・フラン債、ドイツ・マルク債を中心に発行規模が飛躍的に増大した。とくに民間債の比重が高くなってきており、その理由としては、(1)企業が内外市場を問わず低コスト資金を追求している、(2)無担保の起債が可能、(3)経済取引の国際化に伴い為替リスクのヘッジ（自分が投資のために外債を保有している相手国において外債を発行して、為替変動の危険を回避すること）が重要になってきた、などがあげられている。従来、企業の外債による資金調達には、普通社債、転換社債、新株引受権付社債（ワラント付社債）の3種類があったが、2002年（平成14）4月1日施行の改正商法により、転換社債および新株引受権付社債（非分離型）は、新株予約権付社債に一本化された。なお、新株予約権付社債のうち、新株予約権が行使された場合には、当該行使に係る払込みにかえて当該社債の金額が償還されるもの（2002年4月の商法改正前の転換社債に相当するもの）は、転換社債型新株予約権付社債とよばれている。

　歴史的には、19世紀の前半から外債の発行がみられ、その大部分は、当時イギリスが唯一の工業国であった関係上、ロンドン金融市場でなされた。19世紀後半からは各先進国の資本輸出が外債の引受けの形で行われ、第一次世界大戦後はニューヨークが外債発行市場として大きな地位を占めるようになった。第二次世界大戦後も引き続きニューヨークが外債発行の中心にあったが、1960年代後半から徐々にヨーロッパ資本市場が外債発行に大きな比重を占めつつある。とくに、1999年のヨーロッパ通貨統合により、新しい通貨計算単位として「ユーロ」が導入され、2002年より、ユーロを単位とする紙幣・硬貨が発行された。そのため、ユーロ市場の発展に対応して、ユーロ債の発行残高が急速に増加している。

［原　司郎・北井　修］