A bond that pays interest (coupon) in one currency and principal in another currency. This type of bond may be issued in one currency, but either its coupon or redemption amount or both are denominated in a different currency. For instance, a dual currency bond might be structured to pay coupon in euro and the principal in U.S. dollars. In essence, this bond is currency-based synthetic as it combines a standard bond with a different currency. It was initiated in the Euromarkets in 1981.
A heaven-and-hell bond is a subclass of dual currency bonds.
