medium · Debt Capital Markets rates-macro-drivers

In a 'Reverse Yankee' issuance, why might a US-based corporate choose to issue debt in Euros even if they only need US Dollars?

1. The Eurozone allows for much higher leverage ratios than the US domestic bond market.
2. It eliminates the need for any interest-rate hedging as the Euro is a more stable currency.
3. Euro-denominated bonds are naturally exempt from all US credit rating requirements.
4. The all-in cost after swapping Euro proceeds back to USD may be lower due to a favorable cross-currency basis.

Sign up free to see the explanation and track your rank →