We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is a Dragon Bond?

Mary McMahon
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A dragon bond is a long-term debt obligation issued by an Asian nation other than Japan and denominated in foreign currency. Such bonds provide access to foreign investment and can attract funds from outside the country. Like other bonds, they are bought and sold on secondary markets, and can be an area of lively financial activity in some regions. Investors with an interest in dragon bonds can access listings, reviews, and other information through financial publications.

Nations throughout Asia and the Pacific Islands can issue dragon bonds. China is one of the leading producers of such investments. The bonds can fund a variety of activities for companies and agencies that need access to capital for projects. Interest and repayment terms can vary, but are all calculated in a foreign currency. The United States Dollar (USD) is a common choice, as it is viewed as an international standard for investment activity.

Buyers of a dragon bond can choose to hold on to the bond, collecting interest and the eventual payment, or they can sell it on the secondary market. Bonds can also be pooled in mutual funds and other group investments, where they may add reliability, depending on their origins. Like other debt obligations, dragon bonds can represent a risk, because the issuer might not be able to redeem the dragon bond at the time it becomes due.

For Asian nations, dragon bonds can provide a method for enticing foreign investors. Overseas investors may be reluctant to buy bonds in local currencies because of their instability or poor performance on the foreign exchange market. This might limit domestic bonds to domestic buyers, who do not necessarily have access to the kind of capital bond issuers need for projects. A dragon bond offers a foreign investment opportunity to appeal to institutional investors and high net worth individuals from outside the country.

Trade publications and financial media offer information on current and proposed dragon bond offerings, as well as performance on past investments. This information can help investors decide where and when they want to invest money. For those interested in diversification, a fund may be a more suitable vehicle, as it provides access to a carefully balanced mixture of investments to maximize yield and minimize risk. Funds may be administered by financial institutions, private brokers, and other entities, and it is advisable to review their records carefully to develop an accurate picture of their performance.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a SmartCapitalMind researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments

By anon1006240 — On Feb 17, 2022

Thank you so much for the valuable resource of information on dragon bonds. This really helped me.

Mary McMahon

Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.