Bonds can be issued by national governments, government agencies, financial institutions, and corporate (generally referred to as bond issuers). Issuers will pay coupon at the agreed time, and time and repay the principal and coupon at maturity. Investors can earn stable interest income and hold bonds for a long period of time. They may also sell the bonds to earn the appreciation.
- Flexible investment period
You can choose bonds of different maturities according to your own liquidity needs.
- Earn stable coupon income
Bonds can provide stable coupon income during the investment period. Customers must understand the credit risk of the issuer and the terms/features of the bond.
- Multiple settlement currencies
You can choose bonds in different settlement currencies, including USD, HKD, RMB, GBP and AUD, etc.
- Receive principal at maturity
Investors can hold bonds for a long period of time. If the issuer does not default, the principal will be received at maturity.
The Bank currently exempts transaction fee, redemption fee at maturity, custodian fee and cash collection fee.
- Retail bonds or non-retail bonds
Retail bonds would be offered to retail customers. Non-retail bonds are only available for professional investors.
The Bank distributes the bond product for the product issuer and the bond product is a product of the product issuer but not that of the Bank. In respect of an eligible dispute (as defined in the Terms of Reference for the Financial Dispute Resolution Centre in relation to the Financial Dispute Resolution Scheme) arising between the Bank and the customer out of the selling process or processing of the related transaction, the Bank is required to enter into a Financial Dispute Resolution Scheme process with the customer; however any dispute over the contractual terms of the bond product should be resolved directly between the product issuer and the customer.
Risk Disclosure Statement
- We make no representation and accept no responsibility as to the accuracy or completeness of the above information. Investor bears the credit risk of the issuer and has no recourse to Bank of Communications (Hong Kong) Limited.
- The information does not constitute advice to buy or sell any bond. Bond may involve different terms and features (including, but not limited to, perpetual or subordinated bonds, or those with variable or deferred interest payment terms, extendable maturity dates, or those which are convertible or exchangeable or have contingent write down or loss absorption features, Chapter 37 listed bond or those with multiple credit support providers and structures). These kinds of bonds are generally considered as complex products. It is difficult for investors to predict the return on investment or the circumstances under which they need to bear losses, and it is also difficult to determine the amount of loss in advance. In the worst case, you may lose all of your investment. Therefore, such bonds are generally only available to professional investors, and ordinary investors may not be suitable for this kind of products. Before entering into any transaction, investors must carefully read the "Disclaimer"/"Responsibility Statement" and "Risk Disclosure" in the relevant prospectus/offering documents to understand the risks involved.
- Before entering into any transaction, you are advised to carefully read the Offering Circular, discuss with your own investment advisor or other appropriate professional to understand the possible risks and benefits of the transaction if needed. You should also take reasonable steps to assess the risks and appropriateness of the transaction in the light of your own risk, financial situation, objectives, investment tenor and circumstances.
- Bond is not equivalent to deposit, nor should it be treated as a substitute for, time deposit.
- The interest and principal of the bond are repaid by the issuer, and you must bear the credit risk of the issuer or guarantor (if any). If the issuer or guarantor fails to perform the repayment obligations, you may not be able to get back the principal and interest of the bond. In the worst case, you may lose all of your investment.
- Bonds issued under Chapter 37 of the Main Board Listing Rules are only available to professional investors only. The listing status of Chapter 37 bonds should not be regarded as recognition of their commercial value, credit quality, or the quality of disclosure in their listing documents. Such bonds maybe lack of liquidity and may not even have a secondary market. Where you seek to liquidate or sell your position prior to its maturity, you may not be able to sell the bond successfully, or you may receive substantially less than its original purchase price. Before entering into any transaction, investors must carefully read the "Disclaimer"/"Responsibility Statement" and "Risk Disclosure" in the relevant prospectus/offering documents to understand the risks involved.
- The price of bonds fluctuates and any individual bond may go down as well as up. Bond investment involves risk, including the possible loss of the principal amount invested.
- The information on the website does not form part of the Offering Circular.
- The above information is for reference only and does not constitute any investment solicitation, offer, invitation or advice to subscribe any investment product. This webpage has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong.
- You should have a banking account and a Debt Instrument Account with the Bank to give subscription instruction online.
- An investment in bonds is not equivalent to a time deposit and should not be taken to replace a time deposit.
- Credit risk - The credit ratings assigned by credit rating agencies are not a guarantee of the credit reliability of the issuer and the guarantor (if applicable). If the issuer and the guarantor (if applicable) are unable to perform its obligations under the bond, become insolvent or breach any of its obligations under the bond, or the issuer and the guarantor (if applicable) file for or are filed for bankruptcy procedures or reorganization of debt plans or similar procedures to avoid bankruptcy may cause the issuer to fail to pay interest or principal as scheduled. In the worst case, investors may lose all investment amount.
- Interest rate risk - Changes in interest rates may have a significant impact on the market price of the bonds. In general, bond prices fall when interest rates rise. In this situation, you may incur a loss from the decrease in market price of the bonds if you sell the bonds before the final maturity date.
- Exchange rate risk – Investing in bond that are not denominated in local currency. If the denominated currency of the bond depreciates relative to your local currency during the bond holding period, the loss caused by exchange rate fluctuations may be offset (even more than) return on investment when the bond is calculated and settled in your local currency.
- Political and policy risks - Political instability, changes in government policies and regulations may affect the issuer and the bonds, thereby increasing investment risks and affecting investment returns.
- Inflation risk - When inflation occurs, the return on investment bonds will also lose purchasing power due to rising prices.
- Liquidity risk - If you try to sell your bonds before maturity, it may be difficult or impossible to find a buyer, or the sale price may be much lower than the amount you had invested.
- Reinvestment risk – For callable bonds, if the issuer redeems the bonds before the maturity date, and you reinvest the recovered principal in other bonds with similar risk feature, the return may be lower than the original bond investment.
- Event risk – Events, including but not limited to issuers' mergers and acquisitions, issuing new bonds to raise capital for corporate restructuring activities, capital restructuring, etc., may weaken the issuer's ability to redeem your bonds.
- The risk of RMB bonds - If investors choose to invest in RMB bonds, please note that RMB is subject to exchange rate risks and that RMB is currently not a freely convertible currency. The conversion of RMB through or by banks in Hong Kong is subject to certain RMB policies or other restrictions and relevant Hong Kong regulatory requirements.
- Applicable to callable bond - When the issuer exercises the redemption right before the maturity, investors will face the reinvestment risk.
- Applicable to perpetual bond - There is no maturity date, and the coupon may be postponed or even suspended according to the issuance terms and condition. The coupon payment depends on the viability of the issuer in the very long term.
- Applicable to subordinated bond - Investors holding this bond bear higher risk than senior bond holders, because once the issuer is liquidated, the priority of claims for subordinated bonds will be lower.
- Applicable to extendable bond – Investors would not have a definite schedule of principal repayment.
- Applicable to exchangeable bond - Investors must bear the investment risks of both stocks and bonds.
- Applicable to convertible (including contingent convertible) bond- Investors must bear the investment risks of both stocks and bonds. When a trigger event occurs, this bond may be written off in whole or in part, or converted into ordinary shares.
- Applicable to bond with non-viability loss absorption feature (e.g. bail-in) - For bonds with non-viability loss absorption feature, when a trigger event occurs, the bond may be written off in whole or in part, or converted into ordinary shares. The bond contains terms that stipulate that the debenture must be written off or converted into ordinary shares when a trigger event occurs under a contract mechanism (i.e. contractual self-rescue), or under a statutory mechanism (i.e. statutory self-rescue). The regional authority responsible for handling the bankruptcy of the issuer will write off the relevant debentures or convert them into ordinary shares in accordance with specific terms. Self-rescue debentures are generally used to reduce losses when they cannot continue to operate.
- Applicable to bond with multiple credit support providers and structures - The bond's non-single credit support provider may not have significant operations, or the bond involves a complex structure that places the rights of bondholders under the rights of a non-single credit support provider.
- Applicable to bond with variable and/or deferral of interest payment terms - Investors would face uncertainty over the amount of coupon and time of the interest payments to be received.