Definition
The term matrioshka bond refers to an indenture issued in the Russian Federation, in Russian ruble, by a foreign bank or corporation. Matrioshka bonds are issued when a corporation wishes to raise capital from investors located in the Russian Federation.
Explanation
Foreign corporations that wish to raise funds in the Russian Federation have the option of issuing what are known as matrioshka bonds. These bonds are sold by non-domestic entities, including corporations, financial institutions and governments, and are issued in Russian rubles. This is typically done when the interest rates in Russia are low relative to the foreign corporation's domestic rates, which lowers their interest expense.
Since the bond is issued in the Russian Federation's domestic currency, investors located in Russia are also insulated from currency exchange rate risk. Foreign companies will usually issue these securities if they have plans to establish operations in the Russian Federation. These bonds are also attractive to investors wishing to geographically diversify their portfolios.
The name of these bonds is derived from the popular Russian nesting doll, known as the matryoshka doll, which is a set of wooden dolls of decreasing size that are placed inside one another. The term means "little matron."
Related Terms
The term kangaroo bond refers to an indenture issued in Australia, in Australian dollars, by a foreign bank or corporation. Kangaroo bonds are issued when a corporation wishes to raise capital from investors located in Australia.
Moneyzine EditorJanuary 23rd, 2024
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.Moneyzine EditorJanuary 9th, 2024
The term maple bond refers to an indenture issued in Canada, in Canadian dollars, by a foreign bank or corporation. Maple bonds are issued when a corporation wishes to raise capital from investors located in Canada.Moneyzine EditorJanuary 24th, 2024- The term samurai bond refers to an indenture issued in Japan, in Japanese yen, by a foreign bank or corporation. Samurai bonds are issued when a corporation wishes to raise capital from investors located in Japan.Moneyzine EditorSeptember 21st, 2023
- The term panda bond refers to an indenture issued in China, in Chinese renminbi, by a foreign bank or corporation. Panda bonds are issued when a corporation wishes to raise capital from investors located in China.Moneyzine EditorSeptember 20th, 2023
