What is Principal-Exchange-Rate-Linked Security?

APrincipal Exchange Rate Linked (PERL) Security is a debt denominated in U.S. dollars, which usually pays interest every six months but has a final yield repayment amount determined by the exchange rate between the U.S. dollar and another specified currency upon the security's maturity. For example, if a company wishes to expanditsoverseas operationsin, say, Thailand,then they may buy this security- with the repayment amount linked to the U.S. Dollar vs Thailand Baht exchange rate -in order to fundit.