International Bonds

A regular stream of income.

International Investment Fund & Bond Investment in Singapore

Long Term Bonds Investment

At Citibank International Personal Bank, we understand your need for an investment with the flexibility to cater to your various financial objectives. That is why we make available to you a wide selection of quality bonds to suit your investment objectives.

Bond investments allow you the flexibility to choose from bonds of various currencies and tenures to diversify your portfolio and at the same time enjoy a regular stream of income from your long term investments in the bond market. Based in Singapore, our bond offerings provide you with long term investment returns as part of a holistic wealth management approach.

If you’re looking to invest in bonds, talk to our relationship manager about the long term investment plan options today.

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Benefits
  • You will enjoy a regular stream of income
  • You will enjoy capital appreciation if you sell the Bond when the price has appreciated (please note prices may also decline)
  • You can diversify your investment portfolio and your risk if you have a portfolio consisting of mainly equities
Features

What are bonds?

  • Bonds are debts issued by governments of countries (e.g. USA, Australia, Germany) and large corporations (e.g. Citigroup, IBM, Toyota) to raise funds to finance projects or businesses.
  • Bonds are flexible instruments that could provide both short-term and long-term gains.
  • Bond tenures can range from as short as 1 month to 30 years or even longer.

When you invest in a bond, you are actually lending to the issuer of that bond and this will provide you with a regular income through the periodic coupon payments and the repayment of your principal at maturity.

As most bonds are tradable securities, you can either hold a bond until maturity or sell it before maturity at the prevailing bond market price.

What you will need

  • Minimum US$100,000

How does a Bond Work?

Here's an example of how you can earn returns when you purchase a bond and invest in the bond market through Citibank International Personal Bank.

Suppose you bought a nominal amount or face value of US$250,000 of Citigroup bond in 2009. This bond pays a fixed coupon of 5.8% p.a. and matures in March 16, 2012.

This bond pays coupon twice a year. This means that each year on March 16 and September 16, you will be receiving fixed coupon payment of US$7,250 [(5.8% x $250,000)/2].

At maturity on Mar 16, 2012 the bond issuer, Citigroup, will pay you the final interest of US$7,250 + the principal of US$250,000.

But should you decide to sell the above bond on March 16, 2010 (before maturity), 2 scenarios could occur:

Suppose the market price of the bond is higher than the par value of US$100:

Market price of bond = US$102
Redemption proceeds from sale of the bond = Market price x Nominal amount
Par Value
= US$102 x US$250,000
US$100
= US$255,000

However, should the market price of the bond be lower than the par value of US$100, the scenario below could occur:

Market price of bond = US$99
Redemption, proceeds from sale of the bond = Market price x Nominal amount
Par Value
= US$99 x US$250,000
US$100
= US$247,500

If you hold your bond till maturity, your capital* would not be affected by price fluctuations because the issuer will repay you the full value (principal amount) of the bond.

* Please note that repayment of principal is subjected to the credit risk of the issuer.

How to Apply

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  • Simply complete the form and we will be in touch with you shortly
  • If you have further enquiry, click here to drop us a note
  • Simply contact your Relationship Manager or our 24-hour CitiPhone Banking at +65 6224 5757+65 6224 5757.
  • If you have further enquiry, click here to drop us a note

You will need to submit the following:

  • Structured Note Transactions Agreement
  • W-8BEN
Faqs

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  • At Citibank, we make available to you a wide selection of quality bonds issued by reputable institutions in bond markets worldwide. You can choose from bonds of various currencies and tenures to best meet your investment objectives.
  • When you invest into a bond with Citibank, you do not need to worry about the custody of the bond. Instead, Citibank will keep the bond for you and any coupon received will be credited automatically into your account.

Citibank offers you the choice to purchase several different types of bonds. You can invest in the bond market in a variety of ways, such as through:

Fixed Rate Bond

Coupon interest is known until the maturity of the bond

Floating Rate Bond

Coupons are variable and are frequently adjusted to reflect prevailing market interest rates. The advantage is that it provides the investor with a return commensurate with the prevailing market rate. When investing in Floating Rate Bonds, the investor is taking the bond issuer's credit risk. Compared to Fixed and Zero Coupon Bonds, Floating Rate Bonds are less risky investments

Zero Coupon Bond

No interest payable throughout the life of the bond. The offer price is usually at a deep discount (e.g. purchase at US$70 and matures at US$100 in 5 years)

Callable Bond

The issuer has the option to redeem the bond before maturity on specific dates at specific prices. Due to this callable feature, the coupon rate is usually higher

As with any investment, bonds also carry risk. Comparing deposits, high credit quality bonds and stocks, deposits rank the safest followed by high credit quality bonds.

Market Risk

Market risk is the risk of bond prices fluctuating as a result of changes in interest rates and inflation outlook. Generally, when interest rates are on the rise with inflationary outlook, bond prices will fall. Moreover, the longer the maturity, the more sensitive the bond price is to these macro-economic changes.

Credit Risks

Investors assume the credit risk of the issuer. This product is not a bank deposit, is not government insured, is not an obligation of nor is it guaranteed by Citibank Singapore Limited/Citigroup Inc. or their affiliates (unless expressly stated in the relevant product documentation).

Liquidity Risk

During adverse market conditions, holders of a bond may not be able to liquidate all or part of their securities as and when they require. In addition, certain bonds may not be marketable and as such, cannot be liquidated before maturity. Investors should expect a rapid decrease in mark to market prices especially after a large coupon is paid. In the event the investor wishes to liquidate his bond before maturity, he/she will have to sell at the current available market price, which may result in a loss of principal. However, there can be no assurance that the investor will be able to obtain a firm bid price for the bond for an amount at which he/she wishes to sell.

Settlement Risk

The investor assumes all settlement risks relating to failing to settle the bond on the relevant settlement date. In the event the issuer or counterparty fails to settle the bond, Citibank will return the money to the investor without interest. At maturity, funds will be passed on to the investor only after receipt of good funds by Citibank Singapore Limited from the issuer or counterparty. This may result in payment to the holders of this product on a date subsequent to the stated maturity date.

Sovereign Risk

Payment of bonds may be affected by the economics and political events in the country of the relevant issuer. The occurrence of a sovereign risk event could result in the loss of all or a portion of the principal invested should, as a result of any economic or political circumstances, payment may be made in the local currency of the country, of the relevant issuer instead of the original invested currency.

Foreign Exchange Risk

Investors investing in bonds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may result in the receipt of reduced sums and/or a loss of principal when converted to the investor's local currency.

* The above is a summary only of some of the key risks in investing in bonds. Detailed risk disclosures are set out in the documentation relating to the specific product. Prior to entering into a transaction, you should ensure that you have read and understood the nature of all of the risks associated with the investment in order to determine whether the investment is suitable for you in light of your experience, objectives, financial position and other relevant circumstances. You should consult with your legal, regulatory, tax, financial and/or accounting advisors to the extent you consider it necessary in making your own investment decision.

Disclaimers

These securities are obligations only of the issuer. Unless otherwise stated, they are not bank deposits or obligations of or guaranteed by Citibank Singapore Ltd, Citibank, N.A., Citigroup, Inc. or any of its affiliates or subsidiaries (except in the case that Citigroup, Inc. or any of its affiliates or subsidiaries is the issuer), and are subject to investment risks, including the possible loss of the principal amount invested. These securities are not insured products under the provisions of the Deposit Insurance and Policy Owners' Protection Schemes Act 2011 of Singapore and are not eligible for deposit insurance coverage under the Deposit Insurance Scheme and are not insured by the Federal Deposit Insurance Corporation. Investors investing in securities denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Exchange controls may be applicable from time to time to certain foreign currencies. You should therefore determine whether any foreign currency investment is suitable for you in the light of your investment objectives, your financial means and your risk profile. These securities are not available to US persons. Citibank full disclaimers, terms and conditions apply to individual products and banking services.