A Eurobond is denominated in a currency other than the home currency of the country or market in which it is issued. It is a bearer bond, which means it is unregistered, and payable to the person who carries it; losing a Eurobond is like losing a wallet filled with currency. These bonds are frequently grouped together by the currency in which they are denominated, such as eurodollar or euroyen bonds. Issuance is usually handled by an international syndicate of financial institutions on behalf of the borrower, one of which may underwrite the bond, thus guaranteeing purchase of the entire issue.

They are issued only by large, credit-worthy companies, development banks and state-owned corporations, and are generally unsecured.

• Eurobonds gives issuers the opportunity to take advantage of favourable regulatory and lending conditions in other countries. Eurobonds are not usually subject to taxes or regulations of any one government, which can make it cheaper to borrow in the Eurobond market as compared to other debt markets.
• Eurobonds create a liability in a foreign currency to match against a foreign currency asset.
• They are also extremely flexible. Most Eurobonds are fixed rate but they can be floating rate or linked to the financial success of the company or the government.
• Obtaining financing by issuing Eurobonds is often cheaper than obtaining a foreign currency bank loan.
• It is a way for companies to obtain financing in an economy where financing is hard to obtain. Issuing Eurobond gives companies wider access to the international market which they may normally not be able to access.
• Since Eurobonds are normally aimed at institutional investors and not the public, there are no advertisement costs involved and this means lower cost for the issuing firm.                                       (Any 3 points)
  

• Currency risk may arise if the investment the bonds are funding generates net revenues in a currency different from that the bond is denominated in.
• The Eurobond market has been criticized as being a haven for tax-shy investors.
• Lower overseas interest rates are not necessarily good news. Many corporate treasurers who try to take advantage of relatively low overseas interest rates often overlook the reasons why interest rates are lower overseas.
• Because Eurobonds are unsecured, companies that issue them must be internationally known and have an excellent credit rating.
• There could be huge costs, elements of credit risk with all bond issue and also the element of country risk including political risk.                                 (Any 4 points)