MGFC10H3 Chapter 32: Chapter 32 Notes
Document Summary
Effective january 2002, the euro replaced 10 domestic currencies: the cross rate is the exchange rate between two foreign currencies, generally neither of which is the us dollar. The us dollar, however, is used as an interim step in determining the cross rate: eurobonds are bonds denominated in a particular currency and issued simultaneously in the bond markets of several. For many international companies and governments, they have become an important way to raise capital. Eurobonds are issued outside the restrictions that apply to domestic offerings and are typically syndicated in. Foreign companies use adrs, which are issued in us dollars, to expand the pool of potential. Adrs are available in two forms for about 690 foreign companies: company-sponsored, which are listed on an exchange, and unsponsored, which are usually held by the investment bank that makes a market in the adr.
