Bond

Bond is a financial instrument issued by government or government enterprise. The issuer is "debtor". The investor is "creditor". The purpose is to gather the investment from public.


Conditions:
Service available for both primary market and secondary market
- Primary Market: The bank as a seller presents the bond to the primary investor for the government or the government enterprise who issues the bond according to the set price and the coupon rate of the bond.
- Secondary Market: The bank buys and sells the bond used to be sold in the primary market before. Therefore, there are two sides of secondary market.

- Bank sells the bond in secondary market to customer.
- Bank buys the bond from customer in case of the customer require to sell the unmaturity bond.

Nowadays, the bank sells and buys many types of bond in secondary market

- Government bond such as LB03OA, LB033A, LB053A, LB65DA and LB05OA
- Government enterprise bond such as ETA 063 B, PTT 057 A and PTT 087 C
- Other type of bonds customers are interested in or other types of bonds that customers have invested in and want to sell before maturity, please contact the bank to request rate of return and the price for selling and buying.



Advantages:
- Steady income investment, the investor can forecast cash flow of financial document and can invest according to financial plan.
- Lowest risk because the issuer is government or government enterprise.


Benefits :
The investor will receive the benefits as follow:
- Coupon rate specified by the issuer. The issuer will pay to the investor through out the bond period There are 2 types
1. Fixed rate: specific rate for example 5, 6, 7%
2. Floating Rate: the floating rate follows the reference rate for example MLR, saving interest rate




- Capital gain or loss, it can happen in the case the investor sells the bond before maturity. The gain or loss occurs from the difference between the selling and buying price.
- In secondary market investment, even though the investor receives the interest from the issuer for the coupon rate, the money that the investor paid for the bond might not be equal to the face value. The rate of return for investing in the secondary market equals to yield to maturity or YTM. It is calculated from the date of purchase to the maturity.


Investment Conditions:
• Primary Market
- Minimum investment of 500,000 to 1 Million Baht up
- Selling period, within the set period or each type of bond.
- Pricing, in general, the price stated on the bond (Par Value)



• Secondary Market
- Minimum investment of 1,000 units
- Selling period is after the primary market is closed
- The price is not the same as the price stated on the bond (Par Value)