is a type of foreign bond issued in the Spanish domestic market by a foreign entity in euros (EUR). The name comes from the term "Matador", which refers to the main participant in the Spanish bullfight (corrida).
The concept of a matador bond is quite similar to other types of foreign bonds, such as: Kangaroo Bond
, Yankee Bond
, Panda Bond
, but they have differences in features of state regulation and market territory.
The main characteristics of a matador bond are as follows:
1. The Issuer is not a resident of Spain.
2. The issue currency is always the euro (EUR), before the introduction of the euro, placements were always made in pesetas.
3. The organizer of such issues are banks or a group of banks registered in Spain.
4. Can be freely purchased by non-residents of the countries where the placement takes place.
5. Must undergo a special procedure for official registration and placement.
6. Differs in a special taxation regime
It is more expedient to separate advantages, as well as disadvantages for the investor and for the issuer.
Benefits for the investor:
1. High liquidity.
2. Leveling of currency risks (if the investor is from abroad).
3. Stability and high level of development of the Spanish securities market.
4. Higher yield compared to domestic corporate bonds.
Disadvantages for the investor:
1. Higher risks of securities depreciation.
2. Formal restrictions on the purchase and sale (nominal value, increased requirements for the investor).
Benefits for the issuer:
1. High liquidity.
2. Leveling the currency risks of the issuing country.
3. Increased demand for the tool.
Disadvantages for the issuer:
1. Higher investor payouts compared to domestic debt securities in the home market.
2. Increased risk of default if the issuer’s currency is volatile.
3. Less choice of possible organizers of placements.
4. Longer issuance procedure, as well as less flexible placement options.
OC International Investments B.V., 4.25% 27oct2020, EUR
Landesbank Hessen-Thueringen (Helaba), 5.6% 29may2018, EUR