Fixed income bonds and debentures

With the fixed income products you can diversify your investments and profit from the evolution of the different components that influence the price of these assets. You can choose from simple bonds with fixed or variable interest, to structured bonds that gamble on the evolution of other markets.

The movements of interest rate curves at different maturities, the evolution of foreign currencies, the credit rating of the issuers of bonds and securities, or the duration of the same and other factors, have a direct incidence in price formation mechanisms.

Banco Sabadell provides a clear and differentiated offer of fixed income assets which includes bonds, debentures and promissory notes among others. Your personal manager will be delighted to respond to any enquiry you may have with regard to these types of assets.

 

1. Bonds and debentures

Bonds (in the medium term) and debentures (long-term) are financial assets with explicit and regular return in time (coupons) and a determined maturity.

The issuer of the bond can be public (State public debt) or private (company or financial institution) and therefore the investor assumes the risk of the repayment of the capital by the issuer.
 

• In the acquisition an effective value, equivalent to the nominal value for the market price, is invested, plus the accrued coupon until that moment (where relevant)
• The maturity is normally unique and on the given date the investor recovers the invested capital
• The coupons are periodic: usually annual, biannual or quarterly
• The return is fixed and pre-defined or variable, usually linked to an interest rate index (Euribor and Libor among others) and calculated on the invested nominal amount.

Although at maturity the investment is recovered, during the life of the bond, for its valuation, both the evolution of interest rates and of the issuer risk should be taking into account.

 

2. Mortgage notes

Mortgage notes form part of the bonds and debentures category and they therefore have the same characteristics, although they are different for being issued always by credit institutions and for being guaranteed by the mortgage portfolio of the issuer.

 

3. Promissory notes

Promissory notes are an optimal and safe financial instrument to obtain profitability for your cash surplus by investing for shorter periods.

These are zero coupon securities issued at a discount. Their profitability is obtained from the difference between the purchase price and the nominal value of the promissory note that is received on the redemption date.

They are short term , and they have maturity dates of between 3 days and 25 months, although the most frequent periods are 1, 3, 6 and 12 months.

 

4. Other fixed income assets

Subordinated debt:

• Convertible bonds
• Preferential shares
• Mortgage securitisations

We can explain in detail, all the characteristics of these products should you be interested.
 

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On this page a description has been provided regarding the general characteristics of the fixed income products. If you are interested in receiving more information about this product, please contact our offices where you will be advised on the characteristics and risks of the products (applicable indicators and alerts).