If an MNC issues bonds denominated in a foreign currency and that currency depreciates against the MNC's home currency, the funds needed to make coupon payments will increase.

Question

Quizplus · Accepted Answer

If the foreign currency depreciates against the MNC's home currency, it means the MNC will need fewer units of its home currency to purchase the necessary amount of the foreign currency to make the coupon payments, thus reducing the cost of these payments in terms of its home currency.

If an MNC Issues Bonds Denominated in a Foreign Currency