Definition of Yankee Bond

Financial Terms Beginning with Y

What is a Yankee Bond

A Yankee bond is a type of bond issued in the United States by a foreign entity, typically a foreign corporation or government. Yankee bonds are denominated in US dollars and are subject to US securities laws and regulations.

Yankee bonds are often issued by entities that want to raise capital in the US market, take advantage of lower borrowing costs in the US or diversify their sources of capital funding. Yankee bonds are usually registered with the US Securities and Exchange Commission (SEC) and can be traded on US exchanges.

Yankee bonds are considered to be a type of Eurobond, which are bonds issued outside the country of the currency in which they are denominated. The term “Yankee bond" comes from the fact that these bonds are issued by foreign entities but denominated in US dollars.

Risks to Yankee Bonds

Investors who purchase Yankee bonds are exposed to both credit risk and foreign exchange risk, as the value of the bond will depend on the creditworthiness of the issuer and fluctuations in the exchange rate between the US dollar and the issuer's home currency.

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Related Investment Terms

Dim Sum Bond (Hong Kong)

Kangaroo Bond (Australia)

Samurai Bond (Japan)

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