Earn higher returns with a safe, long-term investment.
Looking for a medium-term investment with a higher interest rate? This is for you.
| Issuer | SEC-Registered Philippine Corporations |
| Tenor | 5, 7, 10 years |
| Redemption Price | At par (or 100% of face value) |
| Interest Rate | Prevailing Market Rate (Subject to 20% final withholding tax except for tax-exempt institutions) |
| Interest Payment | Quarterly or Semi-Annually |
| Minimum Investment | Php 50,000 and in increments of P10,000 thereafter |
You can buy/sell the bonds in the open market.
You earn fixed interests or coupons on pre-defined dates
Earn more than 4.75% per annum!
| Peso Corporate Bonds | Treasury Bills (T-Bills) | Retail Treasury Bonds (RTBs) | Fixed Rate Treasury Notes | Dollar Sovereign Bonds | Dollar Corporate Bonds | |
|---|---|---|---|---|---|---|
| Liquidity | Medium | High | High | High | Medium | Medium |
| Available Terms | 5, 7, 10 years | 91, 182 or 364 days | 3-25 years | 3-25 years | 5-25 years | 5-25 years |
| Interest Payment | Quarterly or Semi-annually | In Advance | Quarterly | Semi-annually | Semi-annually | Semi-annually |
| Issuer | SEC-registered Philippine Corporations | Philippine Government | Philippine Government | Philippine Government | Philippine Government or Other Governments | Philippine Corporations or Other Foreign Corporations |
While fixed income securities are considered alternative investment products that can provide relatively higher yield than other traditional bank products, one must still consider if such product is appropriate to your risk profile, financial capability and have a good understanding of the basic features of the instrument. The following is a brief summary of certain risk considerations which you should take into account in deciding whether to purchase fixed income securities. This list is not exhaustive; rather it is intended to highlight certain risks that could be related to your investment.
Fixed income securities are a form of investment that pays out a fixed rate of income over time with the full investment amount returned upon maturity. You can enjoy the benefits of having a stable source of passive income with minimal risk. It’s the perfect investment option that allows you to grow your income regardless of changes in current market performance.
PHP-denominated Corporate Bonds: PHP 50,000.00, in increments of PHP 10,000.
a. Coupon rate is expressed as the percentage (per annum basis) of the face value of the bond. It is the amount that the bondholders will receive for holding the bond. Coupon payments are usually made semi-annually or quarterly. b. Yield-to-maturity (YTM), as the name states, is the rate of return that the investor/bondholder will receive, assuming the bond is held until maturity. YTM accounts for various factors like coupon rate, bond prices, and time remaining until maturity, as well as, difference between the face value and price. Coupon rate is fixed at the issue date, whereas the YTM fluctuates due to market movement and the aforementioned factors. YTM is the better measure of return if the investor decides to trade in the secondary market.
Yes, you may sell your securities in the secondary market provided that there is a buyer. Since corporate issued securities can be traded in the secondary market, those who want to sell his holdings can do so before its maturity date at the market rate.
Termination is subject to prevailing market rates, so your investments might be sold at a discount, par, or premium. Termination will have to be coursed through a Broker Bank’s salesman. The client will have to comply and submit all documentary requirements before the sale of securities can be executed.
Face amount, also known as par value, is the amount that the bondholder will receive at maturity date assuming the issuer of the bond does not default. On the other hand, the settlement amount is the amount that the bondholder pays or receives for the face value; it accounts for the accrued interest, taxes and applicable fees. When a security is traded at a discount (YTM > Coupon rate), the settlement amount may be less than the face amount. On the other hand, when a security is traded at a premium, (YTM < Coupon rate), the settlement amount is greater than the face amount.
Fixed income securities, both USD- and PHP-denominated, may be used as loan collateral at a certain percentage (%) of the face value depending on the type of security and the bank’s credit guidelines.
Buying Corporate Bonds in the primary market or during the Offer Period requires the submission of the following:
Purchasing: Application to Purchase form, PDTC Specimen Signature Sheet, valid government ID and corporate documents for corporate investors
Buying and selling the Corporate Bonds in the secondary market requires the submission of the following:
Purchasing: Investor Registration Form, Letter of Instruction (LOI) for Peso Fixed Income Securities and PDTC Specimen Signature Sheet
Selling: Trade Related Transfer Form, Letter of Instruction (LOI) for Peso Fixed Income Securities and Confirmation of Sale
Note: Additional documents may be required by the Bank or Custodian to facilitate the execution of the transaction.
All Security Bank branches can assist with buy or sell transactions, but execution of transactions are done at the Head Office. Transactions done on or before 11:30 AM for transactions are value-dated same day. Transactions done after cut-off time are for settlement the next banking day.
“On-the-run” securities are the most recent issues of a particular maturity. Conversely, “off-the-run” securities are the opposite. “On-the-run” securities are generally more liquid than “off-the-run” securities.
Government Securities are backed by the full taxing power of the national government and its ability to print money, hence they are practically “default-free”.
It depends on the client’s risk appetite. Government securities virtually have little to no risk as these are obligations of the national government. Chances of the government defaulting, though still possible based on history, is relatively unlikely. Corporate bonds, on the other hand, may carry more risk than government securities.
A custodian and a registry are either BSP-accredited banks or non-bank financial institutions. A custodian holds the securities on behalf of the client, while the registry records the initial and succeeding transfer of ownership of securities.
During settlement date, the securities will be delivered by the seller to the buyer or to its BSP-accredited custodian once all documentary requirements have been submitted.