Eurobonds in 2025: A Guide for Australian Investors & Businesses

As global markets evolve in 2025, Eurobonds are stepping back into the spotlight for Australian investors and companies seeking new avenues for funding and diversification. With shifting interest rates and Australia’s ongoing integration with global capital markets, understanding Eurobonds is more relevant than ever. Here’s a deep dive into what Eurobonds are, why they matter now, and how Australians can leverage them for both corporate funding and investment portfolios.

What Are Eurobonds and How Do They Work?

Despite the name, Eurobonds aren’t tied exclusively to Europe or the euro currency. A Eurobond is an international bond issued in a currency different from the home currency of the country or market in which it is issued. For example, an Australian company could issue a US dollar-denominated bond in Singapore—this would be a Eurobond.

• Currency flexibility: Eurobonds are typically issued in major global currencies, such as USD, EUR, or GBP, rather than the issuer’s local currency.

• International investor access: These bonds are sold to investors outside the issuer’s domestic market, broadening the potential investor base.

• Regulatory advantages: Eurobonds are often subject to less stringent local regulations, making issuance faster and sometimes less costly.

In 2025, Eurobonds are being increasingly used by Australian corporates seeking to tap deeper liquidity pools overseas and by global investors looking for exposure to Australian credit risk without currency restrictions.

Why Eurobonds Matter for Australians in 2025

Several factors are driving renewed interest in Eurobonds among Australian issuers and investors this year:

• Global diversification: With volatility in domestic markets and the Reserve Bank of Australia (RBA) signalling a gradual easing cycle in early 2025, Australian investors are looking offshore for diversification and yield.

• Funding cost optimisation: For corporates, issuing Eurobonds can mean lower funding costs compared to local markets, especially when tapping US dollar or euro markets where demand remains strong.

• Policy updates: The Australian Securities and Investments Commission (ASIC) has streamlined cross-border securities regulation, making it easier for Australian firms to list and trade international bonds, including Eurobonds, on the ASX’s international board.

For example, in February 2025, a major Australian infrastructure group issued a €750 million Eurobond with a 10-year maturity, securing a coupon nearly 40 basis points lower than a comparable AUD bond. The deal attracted over 150 institutional investors from Europe, Asia, and North America, highlighting the global appeal of Australian credit.

Risks, Rewards, and How to Access Eurobonds

While Eurobonds can offer attractive returns and diversification, they come with unique considerations:

• Currency risk: Investors face exchange rate movements between the bond’s currency and the Australian dollar, which can impact returns.

• Liquidity: Some Eurobonds, especially those from smaller issuers or in niche currencies, may be less liquid than domestic bonds.

• Regulatory landscape: Although ASIC has eased some restrictions, tax and reporting requirements still apply. The 2025 updates to Australia’s withholding tax regime mean most qualifying Eurobond interest payments remain exempt for non-residents, but investors should check the latest ATO guidance.

Australians can access Eurobonds via:

• Managed funds and ETFs: Several Australian and global bond funds now include significant allocations to Eurobonds, offering easy access and professional management.

• Direct purchase: Sophisticated investors and institutions can purchase Eurobonds through international brokers and platforms that offer global fixed income products.

The Outlook: Eurobonds and Global Capital Flows

The global appetite for yield, Australia’s growing reputation as a stable credit, and regulatory facilitation are all set to keep Eurobonds on the radar in 2025. For businesses, Eurobonds open the door to more competitive funding; for investors, they provide a pathway to international diversification.

With cross-border finance only becoming more accessible, understanding Eurobonds—and how they fit into a modern portfolio or funding strategy—could be a smart move for Australians navigating the evolving financial landscape this year.