Mestbank transacts a wide range of operations with veksel bonds.
1. Issue of simple bonds
To attract investment, Mestbank issues simple bonds, of two types, namely, interest-yielding and discount bonds. An interest-yielding simple bond is the Bank's unconditional obligation to pay the bond holder the principal of the bond and the interest accrued on it at maturity. A discount simple bond is the Bank's unconditional obligation to pay the bond holder the principal of the bond at maturity. In the latter case, the bond holder's income is the difference between the purchasing price of the bond and the amount paid to him at redemption. The bond amount may be either in roubles or in hard currency. Circulation of hard-currency bonds is carried out in conformity with the law of the Russian Federation on currency regulation and currency control.
Compared to other financial instruments, bonds have the following advantages:
- they can be used as a means of settlement and as a means of payment, in particular, in mutual settlement of obligations and in combating a non-payment crisis;
- they can be used as a security in drawing a loan from the Bank;
- the title to them can be transferred to another person by means on endorsement.
2. Lending to Customers against Bonds
Signing with Mestbank a relevant lending agreement, a customer can receive registered simple bonds issued by the Bank (divided into packages according to their amounts and maturity). Under such an agreement, the customer undertakes to repay the loan (equivalent to the total amount of the bonds received) and pay the Bank the agreed interest. The interest rates under such loans are lower than with other kinds of lending.
3. Brokerage Services on the Unofficial Bonds Market
Mestbank offers its customers brokerage services in purchase and sale of bonds on the unofficial market, and also advice in formation of investment portfolios and operations with bonds.
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