medium · Debt Capital Markets
In a 'Reverse Yankee' issuance, why might a US-based corporate choose to issue debt in Euros even if they only need US Dollars?
- The Eurozone allows for much higher leverage ratios than the US domestic bond market.
- It eliminates the need for any interest-rate hedging as the Euro is a more stable currency.
- Euro-denominated bonds are naturally exempt from all US credit rating requirements.
- The all-in cost after swapping Euro proceeds back to USD may be lower due to a favorable cross-currency basis.
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