What term describes bonds that are issued in foreign currencies by a foreign entity in U.S. markets?

The appropriate term for bonds that are issued in foreign currencies by a foreign entity within U.S. markets is "Yankee bonds." This designation specifically refers to bonds that are issued by a foreign issuer and denominated in U.S. dollars. Although these bonds are traded in American markets, their foreign currency component means they are distinct from other categories such as Eurobonds, which are issued internationally in multiple currencies but outside the jurisdiction of the currency in which they are denominated.

In this context, Yankee bonds serve a critical role for foreign entities seeking to access U.S. capital while appealing to American investors who prefer bonds that carry a recognizable currency risk. The issuance of Yankee bonds allows these entities not only to tap into the deep liquidity of U.S. markets but also to diversify their investor base.

Understanding the specific definitions and contexts of these bond types is crucial for financial professionals, as it allows for informed investment decisions and a clearer picture of international finance dynamics.