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What is the Coupon Interest Rate?

This is the fixed interest rate established when the bond is first issued. It determines the regular interest payments to the bondholder.

This rate remains constant throughout the life of the bond.

For example, a Treasury Bond with a 5% Coupon Interest Rate pays $5 per year for every $100 of face value, distributed as $2.50 per $100 face value semi-annually until the bond matures.

These payments are known as Coupon Interest Payments.

Note: The dates interest payments are made, and the interest rate, depend on the eTB purchased. See Available eAGBs for details.

What is Yield to Maturity?

The Yield to Maturity (YTM)  is the rate of return on a Treasury Bond if the bond is purchased at the current market price and held until its maturity date, with all Coupon Interest Payments reinvested at the same yield. Unlike the fixed Coupon Interest Rate, YTM fluctuates over time based on changes in the bond's market price.

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Further information

Understanding both the Coupon Interest Rate and Yield to Maturity is essential for investors to assess the potential returns and value of their investment in eTBs.

For more detailed information, refer to the Investor Information Statement for exchange-traded Treasury Bonds.