Corporate & Convertible Bonds

Corporate Bonds are, in its crudest form, loans made to companies from investors. The bonds are issued by the companies aiming to raise capital to invest in their business. They have a nominal value which will be paid back out to the investor at the stated later date (this is known as the Redemption date). They also tend to pay a fixed rate of interest each year - although this can vary depending on the bond. The bonds are bought and sold on the stock market and their price is constantly rising or falling.

Convertible Bonds give the holder the option to exchange the bond for a predetermined number of shares in the issuing company. When the bonds are first issued, they are very similar to a Corporate bond but generally with a lower interest rate. The benefit comes from the potential for the underlying price in the stock to rise. If the underlying stock performs poorly, there maybe no benefit in converting into ordinary shares and the investor can remain holding onto the bond.

With Bank of Scotland Share Dealing, both Corporate Bond and Convertible bonds can be held in our Share Dealing account, our Self Select Stocks & Shares ISA and our SIPP.

Opening Your Account
Your Bank of Scotland Share Dealing Account can be opened with a £100 initial deposit. This can then be invested into any eligible investment of your choice. 

Transfer from your current provider- Find out more about how to transfer from your existing provider to a Bank of Scotland Share Dealing!