Yankee Bond
Quick Definition
A U.S. dollar-denominated bond issued in the United States by a foreign entity, registered with the SEC.
Key Takeaways
- USD-denominated bonds issued by foreign entities in the U.S. market
- SEC-registered with full U.S. regulatory disclosure requirements
- Eliminates currency risk for U.S. investors
- Part of the foreign bond family: Samurai, Bulldog, Kangaroo, Maple
What Is Yankee Bond?
A Yankee bond is a U.S. dollar-denominated bond issued in the American market by a foreign government, corporation, or supranational entity, registered with the Securities and Exchange Commission (SEC). Yankee bonds allow foreign issuers to tap into the world's largest and most liquid bond market, accessing a deep pool of U.S. institutional investors. For issuers, Yankee bonds can provide dollar funding at competitive rates, while U.S. investors can diversify into foreign credit risk without currency exposure. Because they are SEC-registered, Yankee bonds are subject to U.S. disclosure and regulatory requirements, providing transparency and investor protection. The Yankee bond market is part of a family of foreign bond markets named by geography: Samurai (Japan/yen), Bulldog (UK/GBP), Kangaroo (Australia/AUD), and Maple (Canada/CAD).
Yankee Bond Example
- 1Toyota issues $2 billion in Yankee bonds at 4.3% to fund its U.S. operations, avoiding yen-to-dollar currency risk
- 2The Republic of Poland sells $1.5 billion in Yankee bonds to diversify its funding sources beyond euro-denominated debt
Related Terms
Samurai Bond
A yen-denominated bond issued in Japan by a non-Japanese entity, subject to Japanese regulations.
Eurobond
A bond issued in a currency different from the currency of the country where it is issued, allowing borrowers to access international capital markets.
Sovereign Bond
A debt security issued by a national government, considered the benchmark for credit risk and interest rates in that country.
Corporate Bond
A debt security issued by a corporation to raise capital, paying periodic interest and returning principal at maturity.
Bond
A fixed-income debt security where investors loan money to an issuer in exchange for regular interest payments and return of principal at maturity.
Treasury Bond (T-Bond)
A long-term U.S. government debt security with a maturity of 20 or 30 years, paying semiannual coupon interest.
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