Can someone please clarify the difference between these two? Schweser notes don’t go into much detail on the latter.
The bond market consists of two markets:
1) National Bond Market
2) Eurobond Market
regarding 1), National Bond market includes all bonds issued and traded in a specific country and denominated in the currency of that country (e.g. US denominated Bond isseud and traded in the US). There is a distinction in the national bond market between:
a) domestic bonds: bonds issued by companies incorporated in that country (e.g. Ford Motors issued US denominated bonds in the US).
b) foreign bonds: bonds issued by companies incorporated in another country (e.g. Toyota issues US denominated bonds in the US).
regarding 2), A Eurobond is a bond issued in a currency other than the currency of the country or market in which it is issued (e.g. Ford Motors issues US denominated bonds in the UK). Eurobonds are typically less regulated than domestic and foreign bonds because they are issued outside the jurisdiction of any single country. They are usually unsecured bonds and can be denominated in any currency ( including USD ), including the issuer’s domestic currency. They were originally created to circumvent a tax that the US government imposed on 1 b), the foreign bonds.
Global bonds are bonds that are issued simultaneously in the Eurobond market and in at least one domestic bond market.
This question was discussed a while ago in the forum, see below (I gave the same explanation there):
http://www.analystforum.com/forums/cfa-forums/cfa-level-i-forum/91350417