Definition: Currency-linked bonds
External debt - IMF
A bond in which the coupon and/or redemption value are linked to the movement in an exchange rate. Examples of these types of bonds were the tesobonos issued by Mexican banks in 1994. These bonds, issued and payable in pesos, had a redemption value linked to the movement in the U.S. dollar/ Mexican peso exchange rate. When the Mexican peso depreciated, the redemption value increased.
International Monetary Fund (IMF), "External Debt Statistics: Guide for Compilers and Users; Appendix I. Specific Financial Instruments and Transactions: Classifications", Washington D.C., 2003