Callable Bond

A callable bond allows the issuer to redeem the bond on a call date before the bond matures at a defined call price, and usually offers a higher yield than simple bonds without the callable feature. As a general rule, when the interest rate bottoms out, the issuer will be less likely to call back the bond.

Illustrative Examples

November 2013

In November 2013, Miss Lee invested in a callable bond with a face value of US$200,000 at market price of 100%. Details are as follow:

- Coupon Rate (p.a.): 4%
- Maturity Date: 15 November 2019
- Call Price: 100%
- Call Date: 15 March 2017

Call Date

On 15 March 2007, if the issuer "recalls" the bond back from Miss Lee, then the return for Miss Lee would be:

US$200,000 x 4% x 40/12 years = US$26,667




Risk Disclosure Statement


The above is an illustration example and only for the ease of your understanding of our products. The actual amount shall depend on the actual amount of investment involved.

The information contained on this page is for reference only. Shanghai Commercial Bank ("the Bank") makes no warranty as to the accuracy or completeness of the information provided herein. It constitutes neither 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 in bonds denominated in non-local currency should be aware of the risk of exchange rate fluctuations, which may cause a loss of principal. Unless specified, these investments are not obligations of or guaranteed by the Bank. This investment service is not open to US citizens. Bond prices may go down as well as up. The Bank accepts no liability for any direct or consequential loss arising from use of this website. The Bank does not guarantee the existence of a secondary market for bonds.


Important Notes

  • This webpage has not been reviewed by the Securities and Futures Commission or any other regulatory authorities in Hong Kong.
  • This is an investment product. The decision to invest is yours but you should not invest in bonds unless the intermediary selling them has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
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