## International Bonds and Euro Issues by Indian Companies

### Types of Euro/International Bonds

Bond Type	Key Feature
Yankee Bond	USD-denominated, issued in USA
Samurai Bond	JPY-denominated, issued in Japan by non-Japanese company
Bulldog Bond	GBP-denominated, issued in UK
Euro Convertible Bonds	Debt + equity option; convertible at premium; may include call/put options
Euro Convertible Zero Bonds	No interest; converts to equity on maturity
Euro Bonds with Warrants	Bond + detachable equity warrant; bonds often traded at discount
ESG-Linked Bonds	Used for Environmental, Social, Governance goal projects

### ESG Bond Types

Bond Type	Keywords
Green Bonds	Eco-friendly projects (e.g., Ghaziabad Green Bond 2021)
Social Bonds	Social causes: health, education, human rights (e.g., Vaccine Bonds)
Sustainability-Linked Bonds (SLBs)	Linked to performance goals like carbon reduction

### Euro Issues by Indian Companies

Indian companies raise foreign currency funds via:

GDRs – Global Depository Receipts
ADRs – American Depository Receipts
FCCBs – Foreign Currency Convertible Bonds

### ADR vs GDR vs IDR

Basis	ADR	GDR	IDR
Meaning	Certificate by US bank for foreign company shares	Certificate by international bank for foreign company shares	Foreign company raises funds from Indian investors
Issued Where	USA	Europe/Asia (global markets)	India
Listed In	NYSE, NASDAQ	London, Luxembourg exchanges	Indian exchanges
Currency	USD	USD or EUR	INR
Investors	American investors	Global investors	Indian investors
Regulation	SEC (US)	Foreign stock exchange regulations	SEBI
Disclosure	Strict (US GAAP)	Less than ADR	As per SEBI

> Memory hook: ADR = America, GDR = Global, IDR = India (the issuer's investor location matches the prefix).

Worked example

### Example 1

Q: An Indian company wants to list its shares in London and raise funds from European investors. Which instrument should it use?

A: The company should issue GDRs (Global Depository Receipts). GDRs are listed on European exchanges (e.g., London, Luxembourg), denominated in USD or EUR, and targeted at global investors. ADRs would be used for US markets; IDRs are used by foreign companies to raise funds from Indian investors.

### Example 2

Q: Classify the following bonds: (i) Bond issued by an Indian company in Japan, denominated in Yen (ii) Bond used to fund solar energy parks, linked to carbon reduction targets.

(i) Samurai Bond – issued by a non-Japanese company in Japan, regulated by Japanese authorities, JPY-denominated.

(ii) Sustainability-Linked Bond (SLB) under ESG bonds – linked to a performance goal (carbon reduction), which is an environmental target.

⚠️ Common exam mistakes

Confusing Bulldog bond currency: Bulldog is GBP-denominated (not Yen). Only Samurai is Yen-denominated.
Saying IDRs are issued by Indian companies – IDRs are issued BY FOREIGN companies to raise funds FROM Indian investors.
Treating Euro Convertible Zero Bonds as paying zero coupon forever – they convert to equity at maturity, unlike regular zero-coupon bonds that pay face value.
Mixing up ADR and GDR disclosure levels: ADRs require US GAAP compliance (stricter); GDRs have less disclosure.

Reference:

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →

International Bonds – Euro Bonds, ESG Bonds, ADR, GDR, IDR

Worked example

⚠️ Common exam mistakes