The term bulldog bond refers to an indenture issued in the United Kingdom, in British pound sterling, by a foreign bank or corporation. Bulldog bonds are issued when a foreign corporation wishes to raise capital from investors located in the United Kingdom.
Foreign corporations that wish to raise funds in the United Kingdom have the option of issuing what are known as bulldog bonds. This is typically done when the interest rates in the U.K. are low relative to the foreign corporation’s domestic interest rates. Issuing a bulldog bond lowers their interest expense. These bonds are also attractive to investors wishing to geographically diversify their portfolios.
Bulldog bonds are usually issued in pound-sterling denominations by a foreign (non-British) corporation or government. The term “bulldog” is a reference to the animal that serves as a national symbol in England, which was first associated with Winston Churchill during World War II.