medium · Debt Capital Markets pricing-yields-curve
What is the 'Cross-Currency Basis' and how does it influence the decision to issue a 'Reverse Yankee' bond?
- It measures the perceived default risk of the U.S. federal government relative to that of the European Central Bank and the broader euro-area sovereigns.
- It is the gap in headline inflation rates between the U.S. and Europe, a gap which over the long run is assumed to dictate the prevailing exchange rate.
- It is the cost of swapping one currency for another; a favorable basis can make issuing in a foreign currency cheaper than issuing domestically after hedging.
- It is a regulatory filing fee levied by the SEC on bonds that U.S. corporations choose to issue within foreign jurisdictions and overseas listing venues abroad.
Sign up free to see the explanation and track your rank →
More Debt Capital Markets pricing-yields-curve practice
- For a bond trading at a discount (below par), which yield measure is typically the same as
- If a bond's Yield to Worst is equal to its Yield to Maturity, what can we likely conclude
- If an issuer decides *not* to call a bond on the first call date even though it is economi
- If a bond's YTW is significantly lower than its YTM, the bond is likely trading at a:
- For a bond with several call dates at different prices, the Yield to Worst is:
- The concept of 'Pull to Par' describes the price convergence… — Which yield measure inhere
- If an investor buys a bond with a 5% coupon at a price of 102, how does the Yield to Matur
- A bond's yield to maturity (YTM) is 7%, but its current yiel… — What does this suggest abo