In a transaction like this one, the parties get to choose the law that applies. Indeed, they are free to choose privately-formulated law and have the disputes resolved by private arbitration organizations (there are several examples of each). That said, it is quite popular to choose New York law to govern international transactions, and litigate issues in New York courts, even when the transactions have nothing to do with New York. That's because New York law is well understood, there is a deep body of precedent involving sophisticated financial transactions, and the courts have a lot of experience resolving financial disputes.
Likely, the bonds cost a little bit less if they're in a jurisdiction where it's going to be relatively easy, straightforward and fair to sort things out in the event things go wrong.
