Chapter 11 - International debt. This chapter examine the use of international debt markets as a source of funding; focus on the role of euromarkets and US capital markets; distinguish between eurocurrency, euronote and eurobond markets; consider US debt markets and securities, explain the role of credit rating agencies. | Chapter 11 International Debt Learning Objectives Examine the use of international debt markets as a source of funding Focus on the role of euromarkets and US capital markets Distinguish between eurocurrency, euronote and eurobond markets Consider US debt markets and securities Explain the role of credit rating agencies Chapter Organisation Introduction The Euromarkets Eurocurrency Market Euronote Market Eurobond Market Markets in the USA Credit Rating Agencies Summary Introduction Who uses international debt markets? Financial institutions are the largest borrowers Also used by governments and corporations Investors are attracted to international debt markets as they Provide a deep and liquid market Allow higher investment returns Are a form of portfolio diversification Introduction (cont.) Deregulation of FX markets have contributed to the importance of international debt markets Chapter Organisation Introduction The . | Chapter 11 International Debt Learning Objectives Examine the use of international debt markets as a source of funding Focus on the role of euromarkets and US capital markets Distinguish between eurocurrency, euronote and eurobond markets Consider US debt markets and securities Explain the role of credit rating agencies Chapter Organisation Introduction The Euromarkets Eurocurrency Market Euronote Market Eurobond Market Markets in the USA Credit Rating Agencies Summary Introduction Who uses international debt markets? Financial institutions are the largest borrowers Also used by governments and corporations Investors are attracted to international debt markets as they Provide a deep and liquid market Allow higher investment returns Are a form of portfolio diversification Introduction (cont.) Deregulation of FX markets have contributed to the importance of international debt markets Chapter Organisation Introduction The Euromarkets Eurocurrency Market Euronote Market Eurobond Market Markets in the USA Credit Rating Agencies Summary The Euromarkets Consist of large unregulated money and capital markets Major centres in London, the Middle East and Asia Euromarket transactions are mainly denominated in a currency other than the currency of the country that issued the debt USD is the dominant currency Chapter Organisation Introduction The Euromarkets Eurocurrency Market Euronote Market Eurobond Market Markets in the USA Credit Rating Agencies Summary Eurocurrency Market The major forms of eurocurrency facility discussed are Short-term bank balances Stand-by arrangements Medium- to longer-term eurocurrency loans Eurocurrency Market (cont.) Short-term bank advances Similar to ‘fully-drawn advances’ Term determined, and full amount drawn-down on approval Commitment fee may be charged if not drawn-down immediately after approval .
