A global bond is a negotiable security issued in several countries simultaneously. It can be both public and private.
In the field of finance, the global bond stands out as a model of negotiable security characterized by its listing on secondary markets.
In practice, this instrument has important similarities with the Eurobond. This is issued in different countries beyond the national issuer and in foreign currency, adapting to each location.
However, the global is known in the stock market world for being more accessible and identifiable with important brands or public institutions.
In addition, the main mission when issuing a bond of this type is to address different financial markets and multiple geographical points.
Differentiating features of the global bonus
Compared to other existing investment alternatives, the global bond has the following features to take into account:
- main high volume: These instruments are issued with significant capital, since their objective is to be present in various international markets.
- Temporary location: This type of bond is located in the medium and long term (usually occupies financial terms of 1 to 30 years).
- Outsourcing: These securities are sold outside the country in which they are issued, betting on an international and global approach. They are related to the concept of multicurrency (issuance in both local and foreign currencies).
- Specific origin: The issuing organizations of this type of title respond to the identity of a large company or public institutions. In other words, they often enjoy international recognition and prestige, facilitating their dissemination.
Financial relevance of the global bond
The appearance and expansion of this financial modality has largely responded to the appearance of new telecommunications channels and diffusion of stock markets.
In this sense, the first antecedent of a global bond was carried out by the World Bank at the end of the eighties of the last century, in an environment of incipient technological globalization.
Since then, the appearance of large multinational companies and their expansion has also motivated the financial commitment to this type of instrument.
At the same time, many countries have made the issuance of public debt securities a prominent financing model. For this they have used the global bonus scheme in turn.