A Yankee bond is a type of bond is regularly issued by foreign banks. Here are the basics of the Yankee bond and how it works.

Yankee Bond

The Yankee bond is a type of bond that is available for purchase in United States dollars. These bonds are issued directly from foreign banks and companies into the United States market. In order to issue this type of bond, the issuing entity has to meet certain regulations that are presented by the SEC. In order to issue these, the bank or company has to first register with the SEC and provide them with certain information about the bond.

Benefits

This type of bond can be particularly attractive to domestic investors. One of the big benefits of this type of bond is that you can diversify your portfolio a bit. Instead of investing only in domestic securities, you can get involved with a foreign market. Another advantage with this type of investment is that it is convenient for American investors. They do not have to exchange their dollars into a foreign currency before they can invest. This limits the amount of transaction risk and makes it very simple for them to get involved.

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