Reissued Warning Regarding Investing In Corporate Bonds
Persons considering an investment in a corporate bond should focus not only on the promised interest rate but also the risks that are associated with the investment. These risks are required to be listed in the public offering "Prospectus". The issuer company, and the broker selling the bonds on behalf of the company, are required to deliver a copy of this prospectus to all persons considering a purchase of the bonds.
In light of the above, the NBG urges persons considering an investment in corporate bonds to take several important steps:
1. Obtain a copy of the prospectus that describes the bonds (do not invest if you have not received a copy of the prospectus);
2. Carefully examine the risk factors that are associated with the investment (if you do not understand that risk factors, consult with a professional, preferably a neutral third-party);
3. If you cannot assess the risks adequately, strongly consider declining the investment.
Lastly, as a rule, high-risk investments tend to carry high promised interest, but the opposite is not always true. Therefore, regardless of the rate promised, the potential investor should still review the risk factors in the prospectus and seek professional guidance. Offerings made directly by the company, and not through a licensed securities broker, should be viewed with particular caution.