Fixed rate bond investors may receive regular interest payment quarterly, semi-annually or annually over the life of the bond, depending on the terms of the bond.

The Benefit of Fixed Rate Bond

1. Regular Interest Income

Suppose Miss Lee invested US$236,325 in a US Corporate Bond at the market price of US$94 in January 2000. This bond, with Face Value of US$250,000, has a Coupon Rate of 6% p.a. and will mature in August 15, 2009. This means that Miss Lee will be receiving an interest payment of US$15,000 (6% p.a. of US$250,000) every year before the maturity. At maturity, the bond issuer will then pay Miss Lee the final interest of US$15,000 plus the US$250,000 Face Value.

2. Potential Capital Return

If Miss Lee has decided to sell the above bond in July 2003, and the Market Price of the Bond at the time is US$119. Miss Lee will receive a pro-rated interest payment as well as US$297,500 [i.e. (US$119/100) x US$250,000] for the sale of the bond.

Total Return：
=(US$119 - US$94) / US$100 x US$250,000 + pro-rated interest payment
=US$62,500 + (US$15,000 x 2.5 Years)
=US$100,000

This is an investment product. The investment decision is yours but you should not invest in Bonds unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.

Risk Disclosure Statement
This page is for information and reference purpose only. Shanghai Commercial Bank (“the Bank”) makes no warranty as to the accuracy or completeness of information provided herein. It neither constitutes a solicitation nor an offer with respect to the purchase or sale of any security. Bond investments are not bank deposits and involve risks, including the possible loss of the principal amount invested. Investors investing in bonds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Unless specified, these investments are not obligations of or guaranteed by the Bank. US persons are not eligible. Bond prices may go down as well as up. The Bank accept no liability for any direct or consequential loss arising from this page. The Bank does not guarantee the existence of a secondary market for bonds.