Dual Currency Bond

Definition:

A dual-currency bond is a hybrid debt instrument with payment obligations over the life of the issue in two different currencies. The borrower makes coupon payments in one currency, but redeems the principal at maturity in another currency in an amount fixed at the time of the issue of the bonds. The price of the bonds in the secondary market is indicated as a percentage of the redemption amount.

Context:

The following are variants of dual-currency bonds: - Foreign Interest Payment Security (FIPS) - Adjustable Long-term Putable Security (ALPS) - Yen-linked Bond - Multiple Currency Clause Bond - Special Drawing Right (SDR) Bond - Shogun or Geisha Bond.