When Nigeria, Kenya, Angola or Côte d'Ivoire borrows money from international investors in US dollars (or sometimes euros), the bonds it sells are called Eurobonds. The prefix is a historical accident from the 1960s, when dollar-denominated bonds first began trading in Europe outside the United States. Today "Eurobond" simply means a bond denominated in a currency foreign to the place it's issued — a dollar bond sold to global investors qualifies no matter which continent the issuer is on.
Why a country issues them
A government can usually borrow at home in its own currency. It reaches into the international market for a few reasons:
- Hard currency. Dollars and euros are useful for paying for imports, servicing existing foreign debt, or building reserves — things local currency can't do directly.
- A bigger investor base. Global funds that would never buy local-currency debt will buy a dollar bond, which can mean more demand and longer maturities than the domestic market offers.
- A visible benchmark. A liquid dollar bond gives the country a public, market-tested cost of borrowing that companies at home can price against.
The trade-off is currency risk sits with the borrower: the country earns much of its revenue in local currency but must repay in dollars, so a weakening local currency makes the debt more expensive to service.
The anatomy of one bond
Every Eurobond on this site is defined by a handful of fixed terms, set when it's issued:
- Issuer — the government borrowing the money (e.g. the Federal Republic of Nigeria).
- Currency — usually USD, sometimes EUR. This matters: dollar and euro bonds price off different interest-rate backdrops, so their yields aren't directly comparable.
- Coupon — the fixed annual interest rate the bond pays, as a percentage of face value (par).
- Maturity — the date the issuer repays the face value in full.
What changes day to day is the bond's price in the market, and therefore its yield — the return a buyer earns at today's price. That relationship is the subject of the next guide.
Bullets and sinkers
Most of these bonds are bullet bonds: they pay interest along the way and repay the whole face value in one lump sum at maturity. Some are amortising bonds (informally, "sinkers"): they repay the principal in instalments over the final years rather than all at once, which lowers the single-date repayment burden. This site handles both.
Information only. This guide is general educational material about how the market works. Nothing here is investment, financial, legal or tax advice, or a recommendation to buy or sell any security.
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