Sovereign Bond
A debt security issued by a national government and denominated in a foreign currency.
Investopedia Commentary
The government of a country with an unstable economy will tend to denominate its bonds in the currency of a country with a stable economy. Because of default risk, sovereign bonds tend to be offered at a discount. Brady bonds, which are issued by governments in developing countries, are a popular example of sovereign debt securities.
Related Links
Bond Basics Tutorial
Basics Of Federal Bond Issues
Investing Beyond Your Borders
See also: Bond, Brady Bonds, Country Risk, Default Premium, Default Risk, Government Security, Sovereign Risk