Formosa Bonds Definition

Forex Glossary

Definition

The word Formosa bond identifies a indenture issued in Taiwan, at a non-New Taiwan dollar denomination, with way of a foreign bank or business. Formosa bonds are among many manners for multi national organizations operating in Taiwan to improve funding.

Explanation

Foreign corporations who desire to raise funding in Taiwan have the option of devoting Formosa bonds. These bonds have been issued in Taiwan from non-domestic entities, at a non-New Taiwan dollar money. Formosa bonds are often issued with the Taiwanese division of a publicly-traded overseas bank or business.

Formosa bonds needs to hold a credit rating of BBB or more. Trading involving securities companies is completed with the GreTai Securities Market’s Electronic Bond Trading System. In case the bond is recorded in an foreign exchange, they are able to be traded between traders employing the overthecounter (OTC) market.

Taiwan’s Financial Supervisory Commission held a competition to name this particular bond. Previously, Taiwan was known for Formosa. The name stems from the Portuguese “Ilha Formosa,” this means island.