New Guaranteed Bond From Bank Of Scotland

by Carla Johnson, Investors Offshore.com

22 July 2005

Bank of Scotland International has announced the launch of a new 5 year Capital Guaranteed Savings Bond. Available in sterling, euros and US dollars, the new Capital Guaranteed Savings Bond offers investors a guaranteed fixed rate return and exposure to the potentially unlimited growth of a stock market index.

Michael Chaytor, Head of Sales and Service, Bank of Scotland International comments, “Our new 5 year Capital Guaranteed Savings Bond Issue 14 combines innovative elements with the certainty of an attractive fixed return to create a product for investors looking to maximize growth. In addition, clients will always get more than their capital back when the bond matures and at present it falls outside the scope of the EU Savings Tax Directive.”

Half of the Bond's capital is invested in an account promising a fixed return and half in a bond that tracks the client's choice of index. Thus, for a sterling investor the Bond tracks the FTSE 100, in euros it tracks the Dow Jones Euro Stoxx 50 and in US dollars it tracks the S&P 500.

Michael Chaytor adds, “You are also protected against last minute dips in the market. For the sterling and US dollar options, the closing level of the index is calculated by taking the average level of the index over the 6 months prior to the bond’s maturity date. For the euro option it is calculated over the 12 months prior to maturity.”

The closing date for applications is 23 September 2005, with the Bond starting on 30 September 2005. However, Bank of Scotland International is encouraging early investors to open an account before the start of the Bond by offering 4.55% gross/AER on sterling deposits, 1.90% gross/AER on euro deposits and 2.75% gross/AER on US dollar deposits.

Sterling investors will receive a fixed annual rate of return of 6% per annum on half their investment, while the remainder will earn 60% of the percentage rate of increase of the FTSE100 Index during the five year life of the bond. Michael Chaytor comments, “With UK money market rates falling, the prospect of a 6% return will be attractive in its own right. Add to this the possibility of further growth through exposure to increases in the FTSE 100 Index and clients have a very powerful product combination.”

US Dollar investors will receive a fixed annual rate of return of 5.25% per annum on half of their investment, while the remainder will earn 50% of the percentage rate of increase of the S&P 500 index during the five year life of the bond.

Euro investors start with half their balance invested in a one year fixed rate account paying 4%. The other half of their investment is used to track the Dow Jones Euro Stoxx 50 Index. After the end of the first year they receive their capital and interest back from the fixed rate account. Then, after a further four years, investors will receive a return based on 50% of the percentage rate of increase of the Dow Jones Euro Stoxx 50 Index based on the second half of their original investment.

Michael Chaytor comments, “Extending the same structure and offering both a high fixed return and a 100% capital guarantee to euro and US dollar investors, means that our Capital Guaranteed Savings Bond Issue 14 represents a truly global offering for the international investor.”

Bank of Scotland International offers a comprehensive range of banking and savings solutions worldwide from its offices in Jersey, Isle of Man and Hong Kong. Bank of Scotland International is part of the HBOS group which enjoys a Standard & Poor’s long-term AA credit rating and Moody’s Aa2 long-term credit rating.

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