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Eurobond

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Last Updated on: 3rd February 2021, 01:41 pm

A Eurobond is a debt instrument that’s denominated in a currency other than the home currency of the country or market in which it is issued. Eurobonds are important because they help organizations raise capital while having the flexibility to issue them in another currency.

Based on European leaders’ proposals, a Eurobond would be a collective bond issued by the 17 member nations of the eurozone.

Since it consolidates the euro zone countries’ debt into a single bond, its credit rating would be substantially higher than that of the PIIGS nations but lower than Germany’s triple-A rating.

The creation of Eurobonds is still up for debate as more stable economies such as Germany are strongly opposed to the idea. However, other debt-ridden nations are hopeful that Eurobonds could be a longer-term solution to the eurozone debt crisis.

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