Eurobonds sectors

The relative liquidity of the Eurobond market compared to the United States is a hotly debated question. The general impression is that the Eurobond market is less liquid than the US corporate sector. The average transaction size is greater in the United States, reflecting the market s larger size ( 1,679 billion versus 651 billion) and the concentrated structure of the investor base. Other obvious liquidity metrics, such as bid/offer spreads are hard to track consistently. What is true is that secondary market trading conventions have converged over time. 

So far in this section we have discussed the secondary market— transactions involving outstanding issues. Let s now turn to the primary sector, through which bond issues are originated and priced. The new issue sector provides the lifeblood of the Eurobond market by supplying new issues to replace those that have matured or been called. Also, bond issues become less liquid as time passes, so greater origination has a direct beneficial effect on the secondary market, as well. 

The sterling-denominated Eurobond market has an active long-dated (30 years or more) sector, and this has led to two important differences in documentation compared to the Euro market. Firstly, to provide additional comfort to investors in long maturity paper, the bonds are often secured by charges on the issuers assets. It is worth noting in this connection that the common terminology can be inconsistent. Market... 

So far this chapter has mostly concerned itself with Eurobonds sold by corporates (including financial institutions). In this section we look at other sectors, such as sovereigns, supranationals, and agencies. 

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