FIXED RATE BOND

Enjoy fixed interest returns on regular intervals.

Invest in Fixed Rate Bonds from Citibank Hong Kong

A fixed rate bond pays a fixed amount of interest on regular intervals. This is the most common type of bonds in the market.

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Features
  • Fixed interest income for a stable return
  • A wide range of bonds available
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How It Works

Illustrative Example

Mr. Chan invested US$96,000 in a US corporate bond at market price of 96% at the end of 2009. Ther face value of the bond was US$100,000. The bond has the following features:

  • Coupon Rate: 6% p.a.
  • Maturity Date: September 15, 2015

Scenario 1: Mr. Chan holds the bond until maturity

Mr. Chan will receive an interest payment of US$6,000 (US$100,000 x 6%) every year before the maturity. On September 15, 2015, Mr. Chan will receive the final interest payment of US$6,000 plus US$100,000 for the face value of the bond.

Scenario 1: Mr. Chan holds the bond until maturity

Scenario 2: If Mr. Chan sells the bond with market price = 102%

If Mr. Chan sells the bond in March 2010 and the market price of the bond at that time is 102%, he will receive a pro-rata interest payment of US$3,000 plus US$102,000 (102/100 x US$100,000) for the sale of the bond.

Scenario 2: If Mr. Chan sells the bond with market price = 102%

Scenario 3: If Mr. Chan sells the bond with market price = 98%

If Mr. Chan sells the bond in March 2010 and the market price of the bond at that time is 98%, he will receive a pro-rata interest payment of US$3,000 plus US$98,000 (98/100 x US$100,000) for the sale of the bond.

Scenario 3: If Mr. Chan sells the bond with market price = 98%

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Disclaimer:Disclaimer:

This publication is for information and reference purpose only. Citibank (Hong Kong) Limited, Citigroup Inc., or any of its subsidiaries makes no warranty as to the accuracy or completeness of information provided herein. It does not constitute a solicitation, nor an offer with respect to the purchase or sale of any security. Bond investments are not bank deposits and involve risks, including the possible loss of the principal amount invested. Unless specified, these investments are not obligations of, or guaranteed or insured by Citibank (Hong Kong) Limited, Citibank N.A., Citigroup Inc. or any of its affiliates or subsidiaries, or by any local government or insurance agency. Investors investing in bonds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Bond prices may go down as well as up. Citibank (Hong Kong) Limited does not guarantee the existence of a secondary market for bonds. Investment products are not available for U.S. persons and might only be applicable to limited jurisdiction.