Definition of Yankee Bonds



Yankee bonds are bonds issued by a company out of a country. For example, a company in the UK issues a bond in the United States denominated in US dollars. A government can also issue Yankee bonds in any other country. However, the process is usually longer than regular bond issuance. There is a requirement of registering the bonds first with the securities and exchange commission of the country in which they are issued.

 


Once the SEC has registered the bonds they can be available for sale in the market. The interest rates are higher than local bonds as the risk of default is higher.


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