Bulldog Bond

Think: English bulldog.

A bulldog bond is traded in the United Kingdom in British pounds sterling, but is issued in another country. Companies choose to issue this type of foreign bond to obtain capital outside of their own country, using a stable currency.

For example, a Nigerian company might want to raise investment capital in pounds sterling for more attractive interest rates, or to increase the amount of their foreign currency. So they would issue a bulldog bond through a bank in the UK that would be purchased mostly by British investors.

There is some foreign exchange risk, in that the value of the sterling in relation to the naira could go down, but if it goes up, investors make hay. Or crumpets. Or...whatever they're into.