The Law Dictionary

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DUAL CURRENCY BOND Definition & Legal Meaning

Definition & Citations:

A BOND that pays interest COUPONS in one currency and PRINCIPAL redemption in a second currency. The exchange rates associated with the coupon and principal cash flows may be specified at the time of issuance, or they may be based on prevailing SPOT RATES at the time the coupons and principal are paid. A company may choose to issue a dual currency bond to HEDGE any FOREIGN EXCHANGE flows from its operations, or take a speculative view on currencies in order to obtain a lower COST OF CAPITAL.


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