Dual Currency Bond

From Reuters Financial Glossary

A bond that pays a coupon in one currency, but is redeemed for a fixed amount of another currency, often the dollar. Investors usually get an above-market coupon, but run the risk that, in this example, the dollar would fall below the exchange rate implied when the amount was fixed. These bonds are attractive to borrowers who operate in the redemption currency because they have no long-term exchange rate risk. For other borrowers, the guaranteed exchange rate can be used in a swap, for example, with corporations having liabilities in the currency of issue.

See also: Swap