What it is:
International bonds are debt securities issued by foreign companies or governments and sold domestically.
How it works (Example):
Foreign companies or governments may issue bonds that are securitized and sold to domestic investors in the form of international bonds. These bonds are typically denominated and pay interest in the currency of the issuing country. Therefore, the value of the bond in the domestic currency will fluctuate depending on the economic conditions and exchange rates between the domestic country and foreign country.