Buy and sell bonds with our International Brokerage Service

Citi International Personal Bank can help you to trade investment bonds across the world, allowing you to diversify your portfolio and spread your risk across a wide range of currencies, locations and market sectors.

What are investment bonds?

By investing in bonds, you are effectively lending money to a company or institution and they promise to repay that debt. Sometimes you specify a fixed rate of interest (known as the coupon) to be repaid at an agreed time in addition to the original sum (known as the principal). But there is a wide range of investment bonds and some come with variable rates of interest and no maturity date.

Bonds are issued by companies, governments and some government agencies. When investing in bonds, you can also trade them on exchanges or directly over the counter with other brokers.

Understanding levels of risk

When investing in bonds, there is a risk that the company or institution will collapse and, since you are effectively a creditor, you may not get your money back.

However, bonds are rated on the basis of how likely the company is to collapse. Government bonds (known as gilts) are lower risk and therefore pay a low level of interest (coupon).

Emerging market bonds are also government bonds, but they are classed as higher risk because they are issued by governments in countries that are less developed.

Investment grade bonds are those that are rated highly by credit rating agencies and are very often large companies with a low risk of defaulting on their debt obligations. They usually pay a higher level of interest than government bonds as, although it is unlikely the company will default, the level of risk is still greater than with a government bond.

Examples of bonds

Please note: These are examples only as at 15th June 2009 they are not recommendations or advice.

For example, a corporate bond such as one issued by Hewlett Packard that is A rated bond denominated in USD pays a coupon of 4.50% with a yield to maturity of 3.30% over a four-year duration.

A U.S Treasury bond has a higher rating of AAA (meaning it is deemed lower risk because it is a Government bond) but pays a slightly lower coupon at 2.5%, with a yield to maturity of 2.17% over one year.

Emerging market government bonds are often rated lower (meaning they are higher risk). A four-year bond issued from the Republic of Turkey is rated at BB- for example but the coupon is more attractive at 11%, with a yield to maturity of 5.39%.

The higher the risk, the higher the coupon or interest you will receive.

What you can trade

With our International Brokerage service you can buy and sell bonds from our extensive range of investment grade, government and emerging market bonds (more than 21 emerging market countries covered in Europe and the Middle East, Asia and Latin America).

Bonds are available in a wide range of currencies including USD, EUR, GBP, AUD, CAD, NZD, TRY, ZAR and CZK.

We offer access to the following type of bonds:

• Zero Coupon bonds
• Fixed Coupon bonds
• Floating rate bonds / notes
• Perpetual bonds
• Convertibles
• Government bonds (US bonds, UK gilt and European bonds)
• Agency and Supras (FNMA, FHLM, EIB, EBRD, IBRD, KFW etc.)
• Corporate (high grade)
• Emerging market (Eurobonds and Yankees by sovereigns and corporate)

The minimum amount required to invest via our brokerage service is US$10,000 (or currency equivalent) for each transaction.

You can also use our international brokerage service for equity trading and to gain access to other financial products.

Take advantage of our International Brokerage

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