Definition of Matryoshka Bond

Financial Terms Beginning with M

What is a Matryoshka Bond

A Matryoshka bond is a type of debt security issued by a foreign entity in the Russian market, denominated in Russian rubles (RUB). These bonds enable foreign institutions to raise capital in Russia, while also providing Russian investors with the opportunity to invest in international entities without being exposed to currency risk.

The name "Matryoshka bond" is derived from "matryoshka," a Russian nesting doll composed of a set of wooden dolls of decreasing size, placed one inside another. The term is used to differentiate these bonds from other foreign currency-denominated bonds, such as Yankee bonds (issued in the United States), Samurai bonds (issued in Japan) and Eurobonds (issued in the European market).


Why Issue a Matryoshka Bond

By issuing Matryoshka bonds, foreign institutions can access the Russian capital market, diversify their funding sources and potentially take advantage of favorable interest rates or investor demand. For Russian investors, Matryoshka bonds offer a way to diversify their investment portfolio by gaining exposure to international entities without the need to convert their investments into foreign currencies.

It is important to note that the market for Matryoshka bonds is not as well-developed or widespread as other types of foreign currency-denominated bonds, such as Yankee bonds or Samurai bonds. This is partly due to the economic and political factors affecting the Russian financial market.


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Related Investment Terms

Dragon Bond (Asia)

Maple Bond (Canada)

Yankee Bond

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