Bonds

Conditions for Bond Trading

Commissions

Bonds are traded on the following commissions (of total value):

Commission	Minimum Commission
0.08%	EUR 80

Target Spreads

Corporate bonds are traded are traded OTC, and hence bid/offer spreads are not public transparent nor standardized.

Bond type	Expected Rating	Commission	Target spread	Example bid/ask
Senior Financials		8 bps.	30-60 bps.	114.00/114.60
Corporate Bonds – Investment Grade/short maturity	Higher than BBB	8 bps.	20-80 bps.	98.00/98.70
Corporate Bonds – High Yield	Lower than BBB	8 bps.	80-200 bps.	102.50/104.00
Hybrids		8 bps.	50-250 bps.	70.00/72.50

Target Spreads: the spreads indicated are minimum spreads and are defined based on normal market conditions. The client is always quote both the bid and ask price and can therefore see the actual spread for every trade. All quotes on request are indicative and treated subject due to market conditions and liquidity issues. Clients can accept the quote and request for trade.

Minimum Trade Size

The minimum trade size for each bond trade is nominal EUR 50,000 or the equivalent in other currencies.

Custody Fee

For all bond positions an annual custody fee applies (charged as a percentage of the market value):

Currency of Bond	Annual Custody Fee
EUR	0.030%
USD	0.035%
GBP	0.025%
NOK	0.025%
DKK	0.025%
CZK	0.25%
Other Currencies	0.045%

The custody fee is charged quarterly (using the closing price on the last trading day of each quarter), or on exit from/sell of the bond position where the client will be subject to the fraction of the quarterly fee for which they have held the bond.

Using Bonds as Margin Collateral

Saxo Bank allows collateral invested in bonds to be used for margin trading (Forex, CFDs, Futures and Contract Options). The percentage of the collateral that can be used for margin trading (collateral value of the bond) depends on the rating of the bond.

Definition	Margin Collateral
Highest Rating (AAA)	95%
Very High Quality (AA)	90%
High Quality (A)	80%

Lower rated bonds are not accepted as collateral for margin trading. If you are unsure what collateral value a specific bond has, send an email to fixedincome@saxobank.com or contact your account executive.

Coupon Payments

Coupon payments from bond positions will be credited to the client’s account less withholding taxes (if any applicable).

Updated 17th April, 2013

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