Which statement best describes a euro sterling bond?

Which statement best describes a euro sterling bond?

• A. A euro sterling bond is issued in sterling within the UK.
• B. A euro sterling bond is issued in euros outside the UK.
• C. A euro sterling bond is issued in sterling outside of the UK.
• D. A euro sterling bond is issued in sterling outside of the UK.

Answer: (D)

Euro-sterling bonds are bonds denominated in pounds sterling that are issued outside the United Kingdom, in the international market. The important point is that the currency is sterling, but the issue is offshore rather than in the UK, which is why the term “euro” is used to describe the market rather than the currency. This combination—GBP denomination with offshore issuance—best describes a euro-sterling bond. So the statement that matches this description is that it is issued in sterling outside of the UK. The other options describe issues in the UK or in euros, which don’t fit the euro-sterling concept.

Euro-sterling bonds are bonds denominated in pounds sterling that are issued outside the United Kingdom, in the international market. The important point is that the currency is sterling, but the issue is offshore rather than in the UK, which is why the term “euro” is used to describe the market rather than the currency. This combination—GBP denomination with offshore issuance—best describes a euro-sterling bond.

So the statement that matches this description is that it is issued in sterling outside of the UK. The other options describe issues in the UK or in euros, which don’t fit the euro-sterling concept.