What is a bond / CD?
Bonds, issued by governments including China, the US and Hong Kong, local quasi-government bodies, supranationals and well-known corporations around the world.
CDs, issued by different high credit quality financial institutions like banks.
Initial Public Offerings (IPOs) for various bonds and CDs.
For more information, access IFEC's The Chin Family website.
|Face value||Offer price||Coupon rate||Coupon frequency||Maturity date||Initial payment|
|USD100,000||98%||3%||Annually||1 Jan, Year 3||purchase amount USD98,000 + accrued interest* USD41.67 = USD98,041.67|
|Maturity date||1 Jan, Year 3|
|Initial payment||purchase amount USD98,000 + accrued interest* USD41.67 = USD98,041.67|
Scenario 1: He holds the bond for 2 years until its maturity
Mr Chan will receive an interest payment of USD3,000 (USD100,000 x 3%) in Year 2, on 1 January.
He will receive the final coupon payment of USD3,000 and the face value amount of USD100,000 in Year 3, on 1 January.