Eurobond A bond issued in a EUROCURRENCY, which can be in the shape of a pure bond with a fixed interest or coupon rate or a convertible bond with the option of converting it into a number of shares at a predetermined price, usually at a small discount on the domestic price. Both the kinds are listed and traded on foreign stock exchanges. In the case of rue bonds the interest has to be paid in dollars, as also the redemption money.

The reason why Indian bonds end GDRs are bought by foreign investors is the higher coupon rate around 5.5% and for shares the prospect of future capital growth. For Indian companies the attractions are access to large funds and inflow of foreign exchange. Also the floatation of successful GDRs is regarded as a mark of corporate excellence.

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