Formosa Bond

Subject – Economy

Context – SBI’s Formosa Bond issuance reflects India’s acceptability among international investors: Dinesh Khara

Concept –

A Formosa bond is a bond issued in Taiwan but denominated in a currency other than the New Taiwan Dollar.
They fall under the eurobond category of bonds because they are denominated by a currency other than that of the country in which they are issued.
They are issued by the Taiwan branches of publicly traded overseas financial institutions and to be traded must have a credit rating of BBB or higher.
Formosa bonds can be issued by subsidiaries of foreign companies which either already operate in Taiwan, or are set up for the purpose.
Formosa bonds are listed and traded on the Taipei Exchange.
- Formosa bonds also listed on overseas exchanges may be traded over-the-counter between bond dealers.