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How do covered bonds work? Covered bonds generate interest (coupon) payments that are fixed by amount and schedule. At the end of maturity the investor receives 100% of his money back. The invested capital is secured by collateral. Given the high degree of safety, the interest rate is moderate.
How do bank debentures work? The investor buys the bank debenture at its issue price. In return, the investor receives periodical interest payments (coupons) and the redemption at the end of maturity. The coupon can be fixed or variable. At the end of maturity the bank debenture is redeemed in full, i.e. paid back, or in the case of a redemption plan, paid back in instalments.
How do subordinate bonds work? Subordinate bonds offer the investor periodical interest payments (coupons) and full redemption at the end of maturity. The interest rate tends to be one to two percentage points above that of non-subordinated bonds, which reflects the higher theoretical risk of subordinate bonds. In reality, subordinate bonds have proven very safe. The claims of holders of subordinate bonds are superior to those of shareholders, because their bond coupons have to be honoured before any share dividends can be distributed by the company.
How does a structured bond work? Maturity, repayment and interest rate (coupons) of a structured bond are defined by the individual terms of issue. The flexibility of the structure makes it possible for the bond to take advantage of current opportunities on the bond market and offer attractive yields.
How does a credit-linked note work? When the reference debtor meets its payment obligations as scheduled, the bondholder receives an attractive return as well as 100 percent of the invested nominal value. However, if there is a credit event (insolvency, default on payment or debt restructuring), the credit-linked note is prematurely repaid and instead of the nominal amount either a bond issued by the underlying debtor is delivered or the current value of a reference bond is determined and paid out. The price of the reference bond will usually be quoted far below 100 percent due to the credit event. This renders tradability of the underlying liabilities difficult and weigh further on the price.
How do s Wohnbaubank fixed-rate bonds work? s Wohnbaubank fixed-rate bonds pay their interest usually once a year. The amount of interest paid is fixed and thus independent of development of the interest rates in the capital markets. The bonds are redeemed at maturity. Interest income from residential convertible bonds of up to 4% is exempt from capital withholding tax.
How do s Wohnbaubank floating-rate bonds work? Floating-rate s residential bonds pay their interest usually once a year. The amount of interest paid is based on the development of the interest rates in the capital markets. Most residential bonds use the euro swap rate as referential rate. Interest income from residential convertible bonds of up to 4% is exempt from capital withholding tax.
How do s Wohnbaubank structured bonds work? Maturity and investment payments (coupons) of s Wohnbaubank structured bonds are determined by a set of regulations. The holder of a target coupon bond receives fixed interest coupons in an initial fixed-rate period and subsequently moves on to floating rates. If the total amount of interest payments adds up to the target coupon, the bond is redeemed prematurely. The differential payment to the target coupon is made at the end of maturity at the latest, which is also when the bond is redeemed in full. An annual interest income of up to 4% from s Wohnbaubank structured bonds is exempt from capital withholding tax.
How do Austrian corporate bonds work? Austrian corporate bonds are issued as fixed- or floating-rate securities. The dividend (coupon) is usually paid once a year, and at the end of maturity the bond is redeemed in full. The maturities are usually within a range of three to thirty years. If the bond has already been issued in the past, the investor may buy the security at its market price which is set by supply and demand. One criterion of evaluation for a bond is the rating it gets from independent rating agencies. The lower the rating, the riskier the investment – and the higher the interest rate.
How do CEE corporate bonds work? New CEE corporate bonds are issued for subscription as fixed- or floating-rate securities. The dividend (coupon) is usually paid once a year, and at the end of maturity the bond is redeemed in full. As investor you know exactly what interest payments to expect. Maturities are mostly medium- to long-term.


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