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Kimchi Bonds Definition

Definition

The word kimchi bond identifies a indenture issued in South Korea, at a non-won denomination, with way of a foreign bank or business. Kimchi bonds have been issued to improve dollars for payoff with trade partners at the United States.

Explanation

Foreign corporations who desire to raise funding in South Korea have the option of issuing what are called kimchi bonds. These bonds have been sold by non-domestic entities, including corporations, financial institutions and authorities, and also are issued at an non-domestic currency. Arirang bonds are issued by foreign issues in South Korea; nevertheless they truly are won-denominated securities.

Kimchi bonds are all attractive to South Korean investors thinking about holding debt that’s issued at a non-domestic money back. But, if a trader buys a security that’s issued in a foreign currency, they have been carrying in a market rate risk.

Kimchi is a very favorite conventional South Korean dish. There are lots of types of kimchi, as it’s prepared using seasonal veggies.