Can EIB bonds lose value?
Despite being called “fixed income” products, the price of a bond varies during its life, and therefore, the investor might not receive the same price paid originally in case of sale before maturity. Plain vanilla bonds, are among other factors, affected by the evolution of the interest rates in the market and a potential change in the market’s perception on the issuer’s credit standing. The evolution of the exchange rate of the currency in which the bond is denominated could also affect the price of the bond. The evolution of the price of structured products is subject to the specific characteristics of the bond. It is very important that the investor understands the specific characteristics of the bonds (e.g. maturity, coupon structure, currency of denomination,…) risk factors and the appropriateness of the bonds for the investor’s portfolio before any investment decision and what are the risks attached to those characteristics. Complex structures might require professional advice.
