Bank of Scotland International has launched a guaranteed bond, that is linked to the stock markets of the Far East, Europe and the UK and offers clients 10% fixed interest return after 12 months on half their investment.
The product is structured so 50% of the customer’s capital is invested for one year at a fixed rate of 10% per annum, maturing on 27 April 2007. The other 50% is invested for five years, tracking the FTSE 100 Index, Swiss Market Index, Dow Jones Euro Stoxx 50 and the Nikkei 225. Investors get back 65% of the average rate of increase of the four indices over the five year period. This matures on 27 April 2011.
For the dollar version Michael Chaytor, head of Retail Sales and Service, Bank of Scotland International, said: “We have also set an investor bonus to encourage earlier participation. If we receive an application by 6 April, the initial holding account will be priced to match the US Federal Reserve rate. If an application is received after 6 April, this return will be lowered to 0.20% below base rate.”
For the sterling product if a customer invests by 6 April, the initial holding account will be priced to match the Bank of England base rate. Similar to the dollar version if the investment is made after 6 April, the rate of return will be lowered to 0.20% below base rate.
The closing date for applications is 21 April 2006. The products are tranche 16 and differ slightly too the previous issues launched. Issue 15 offered investors a fixed rate return of only 8% for the first year. However, investors received a participation rate of 75% of the growth of the indices over the five years.
Issue 15 of the capital protected bond was also the first time that Bank of Scotland International offered a structured product linked to more than one underlying index.
Chaytor previously told International Investment magazine that: "The products are designed for the gap between deposit accounts and equity investments for customers. "Capital protected products first became popular among our customers after the bursting of the technology bubble in the spring of 2000. Part of the reason why there has been increased interest recently is because of the greater potential upside returns on offer from these products."
‘Most significant’ upgrade since launch
Changes happening over coming months
Had accepted British Steel business
Aimed at HNW clients and family groups
Set for 1 April 2019