Fixed Income Securities

These are debt instruments issued by governments or corporations to raise funds for projects and/or operations. Most commonly called ‘bonds’, these products pay investors a regular and fixed amount of interest (i.e. coupon payments) over a period of time, with the principal (or face amount) paid back to the investor on the maturity date of the security.

Bonds offer several key benefits:

• A regular and predictable stream of interest income
• Potential long-term capital gain
• Diversification for investment risk

Government Bonds

These are short to long-term securities issued by the government. The different types include:

Treasury Bills (T-bills) - Short-term peso-denominated securities issued by the Republic of the Philippines through the Bureau of Treasury. These are sold at a discount and redeemed at the face value of the security on maturity date. From their issue date, T-bills usually have tenors of 3 months, 6 months or 1 year.

Fixed Rate Treasury Notes (FXTNs) - Medium to long-term peso-denominated securities issued by the Republic of the Philippines through the Bureau of Treasury. FXTNs pay out interest semi-annually.

Retail Treasury Bonds (RTBs) - Medium to long-term peso-denominated securities issued by the Republic of the Philippines through the Bureau of Treasury. RTBs pay out interest quarterly.

Retail Dollar Bonds (RDBs) - Medium to long-term US dollar-denominated securities issued by the Republic of the Philippines through the Bureau of Treasury. RDBs pay out interest quarterly.

Offshore Sovereign Bonds - Medium to long-term foreign currency-denominated securities issued by the Republic of the Philippines or other sovereigns (for example: Australian Commonwealth, Republic of Indonesia) and listed offshore. These securities pay out interest either semi-annually or annually.

These are borrowings of corporations, which are backed by their credit quality. Investors are expected to earn regular interest (in other words, coupons payments) until the bond matures.

Our global network enables us to refer you to specialists within the HSBC Group offices should you need assistance with your offshore investments and other Private Banking needs. For more information on wealth management options, you can visit the HSBC Premier Banking section or visit any of our HSBC Premier Centers.

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