Listed Bonds

At BMO Financial we offer investors the option to invest into listed bonds.

A corporate bond is a debt issued by a company to raise money as an alternative to share options. If you buy one you are, in effect, lending money to the issuer. In return, the issuer promises to pay you a set rate of interest each year and to repay your capital at a set date in the future (the maturity date).

Corporate Bonds are listed on an exchange to they give investors the option to exit out of the investment. However, should an investor decide to exit out of a bond early there is no guaranteed that they will receive the full amount that they invested in. This is because like all floating instruments they are subject to market forces. Bonds typically are move by interest rates and credit risk scores which are administered by credit rating agencies.

Gilts are bonds issued specifically by the British Government. A conventional gilt will pay you a fixed cash payment every 6 months until maturity, at which point you will receive your final payment and the return of the initial investment.

You can sell corporate/government bonds at any time, and because prices go up when interest rates fall, modest capital gains are possible. These gains are tax-free on Government bonds and some corporate bonds. Interest earned is usually taxed, unless bonds are held in an Investment ISA.

All bonds that BMO Financial offer are freely trading and listed on either the London Stock Exchange or the Luxembourg Stock Exchange. Furthermore listed bonds are subject to an investment grade rating from the major rating agencies in conjunction with minimum levels of liquidity to ensure that we can exit you out of a potion in the need arises.