Bonds

Mortgage-backed securities
These are bonds intended for conservative investors and whose nominal value is fully covered by receivables from mortgage loans. The bank may issue mortgage-backed securities only in accordance with special legal regulations regulating the activities of banks headquartered in the Czech Republic. The holder of a mortgage bond has a preferred position under the Bankruptcy and Composition Act. As mortgage assets in bankruptcy are recovered, the amount due to the bondholder is paid first. Not until this claim is paid may the remaining proceeds be used to satisfy other claims. The interest earned on mortgage bonds issued before 1 January 2008 is exempt from income tax under regulations valid in the Czech Republic.

UniCredit Bank offers you two basic types of mortgage bonds that differ in how their returns are structured:

Zero-coupon bonds
These are bonds that do not make coupon payments and are intended for conservative investors. A bond’s return is represented by the difference between the price at which it is purchased and its nominal value. An overview of all the bank’s currently offered zero-coupon bond issues, including the selling and repurchase prices for individual issues, can be found in the Price List.

Summary conditions for zero-coupon bond issues can be found here.

Structured bonds
These are investment securities. The yield is usually paid in the form of a single coupon, but exceptionally it may consist of several coupons. Their amounts depend upon the price development for the underlying asset. Underlying assets are usually equity market indices, baskets of equity indices or of individual shares, commodities, foreign exchange rates, and the like. Structured bonds can be sold back at any time, and even before their maturity dates. In such case, the investor’s return is given by the difference between the purchase and selling prices

An overview of all the bank’s currently offered structured bond issues, including the selling and repurchase prices for individual issues, can be found in the Price List.

Summary conditions for structured bond issues can be found here.