Bonds
Bonds are debt securities. Upon acquiring bonds you become a creditor of the bonds issuer. Bond issuers can be companies, financial institutions or governments of states. Bond issuers become the debtors of creditors and assume obligations to pay the loan amount and interest according to the time-limits set in advance. Bonds issued by companies and financial institutions are referred to as debt securities, while bonds issued by states are referred to as Government debt securities.
Why are investments in bonds attractive?
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Bonds can serve as a perfect alternative to deposits as interest on bonds is often higher than interest on deposits.
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Bond acquisition allows you to plan future cash flows as you may calculate in advance what income can be expected upon holding the bonds to maturity.
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In the event of a favourable market situation you can gain from a positive change in bonds price by selling them on the market.
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What are the risks of investment in bonds?
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You can lose part or all of the funds lent if the bonds issuer goes bankrupt as it is possible that they are not redeemed. You can also sustain losses when selling bonds prior to maturity as a result of a lower price on the market or due to the absence of liquidity on the market when their sales on the market with minimum losses are impossible. You must know that longer term bonds are subject to bigger risk as it is difficult to predict whether or not the bond issuer will manage to redeem the bonds in the future. More information on bond related risks is available here.
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What bonds are offered by Ūkio bankas?
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Upon entering into the Agreement on the Provision of Investment Services at the Bank’s Branch and Client Service Units providing investment services, you will be able to acquire:
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Lithuanian Government securities which are deemed to be a safe investment as their redemption if guaranteed by the State.
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Eurobonds which can be issued either by states or companies. Eurobonds are offered on international markets in foreign currency and interest on them is higher compared to that on deposits in the same currency.
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Lithuanian companies bonds the redemption of which is guaranteed by the companies’ assets. Generally, interest paid by companies is higher than that paid on Government securities.
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Ūkio bankas bonds which are periodically offered with competitive interest and may be a good alternative to deposits. These bonds are more risky than Government securities as their redemption is guaranteed by the Bank by its assets.
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Bonds of different country Governments, banks and companies with very diverse terms, interest and riskiness.
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Ūkio banko bond issues
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Currently offered issues
