Bulldog bond

A bulldog bond is a sterling bond whose issuer is not British.

A bulldog bond will often be issued because the issuer has (or intends to acquire) a revenue stream or assets in sterling. Matching these to sterling debt reduces exchange rate risk. It may also match a planned expense in sterling (for example, an acquisition in the UK).

It is also possible to raise sterling through the issue of a sterling eurobond elsewhere in the world, but a bulldog bond is issued in the market where sterling securities are likely to be most liquid.

There are other reasons why a bulldog bond may be issued, other than reducing exchange rate risk. Interest rates, currency stability, investor demand for bonds of various types (e.g. a particular sector) all vary between currencies and may be a reason for choosing to raise money in sterling.

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