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Yankee Bond

Categoria — Tipi di obbligazioni
Yankee Bonds are bonds denominated in United States dollars and placed by foreign issuers on the domestic market of the United States.

? Bond issuers are registered outside the United States;
? Bonds are issued in USD;
? Official ratings are required to issue Yankee Bonds (typically Standard & Poor’s and Moody’s);
? Mostly are rated investment grade at least BBB-;
? This type of bond must be registered with the Securities and Exchange Commission (SEC). The exception, for example, is the use of rule 144A;
? In most cases, Yankee bonds are unlisted. Less frequently listed on the European Exchange, both regulated and unregulated;
? Yankee Bonds are often issued in tranches;
? The underwriter of the issue should be a syndicate of American banks;
? Emissions can be up to $1 billion.

Yankee Bonds are attractive to issuers, as they allow to get financing or refinancing in USD.
The issue of Yankee bonds is an opportunity to diversify funding sources outside the local or regional market.

The main investors of such securities are United States insurance companies and pension funds, which prefer to buy long-term financial liabilities, as they allow issuers to obtain long-term financing.

The advantage for American investors is that they have a higher return than American issuers, and they give the opportunity to diversify an international portfolio.
Yankee Bonds also reduce foreign exchange risk when investing in foreign companies.

The main downside is that Yankee Bonds may take more than three months to issue because of strict regulations in the US.
Similarly, while such securities are issued in dollars, currency risk remains. Moreover, because of the country’s fragile economy, bond prices could fall.

The main issuers of Yankee bonds are Europe, which issues 40% of all Yankee bonds. The top five issuing countries within Europe are the United Kingdom, Germany, France, Switzerland, and the Netherlands, accounting for 70% of all Europe and 28% of the globe.

An example of a Yankee Bond is F-Brasile, 7.375% 15aug2026, USD
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