Yankee Bond

Posted in Finance, Accounting and Economics Terms, Total Reads: 959

Definition: Yankee Bond

Yankee bonds are usually issued in the US markets usually by the US government and currency used for trading is dollar. The foreign institutions issue Yankee bonds under the set of these conditions. Before participating in these securities it is necessary to register with the Security Exchange Commission. They are issued keeping in mind the following conditions:

Benefits for foreign investors

  • when the US interest rates are lower in comparison with the home country
  • When tax structure is favorable in comparison with the home country.

Benefits for US investors

  • However the American investors cannot draw any benefits from the dollar appreciating against a foreign market.
  • beneficial for the subscribers as they don’t have to pay any interest on the earning.
  • secure against the market risk of dollar fluctuations.
  • They are rated by credible agencies such as Moody investment, Standard and Poor.
  • Well regulated by the American Security Exchange Commission.
  • It gives the  better yield amongst similarly rated  bonds  maintaining a lower level of default risk



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