Minimum Settlement Amount

The minimum settlement amount is the minimum volume of securities at par that is available for sale.

This term is closely related to the terms "nominal" and "integral multiple". Let’s take an example. Let’s say you have chosen a security for which the nominal is 1000 currency units (US dollars, euros or rubles), the minimum settlement amount corresponds to 100,000 of the same currency units, and the integral multiple is 2000. This means that you can buy at least 100 bonds (in the amount of 100,000 currency units in which the issue is nominated), if you want to buy more, then the quantity can be 102, 104, 106, that is, with a step of 2 (or 2000 in money).

On local markets, the minimum settlement amount often coincides with the nominal, that is, the investor can buy 1 bond or more of their choice. And the most popular size of the nominal and the minimum settlement amount in such situations is 1000 in the currency of the issue.

On the Eurobond market the minimum settlement amount is often much higher than 1000 and usually is equal to 100,000 or 200,000 (usually denominated in US dollars or euros), which often limits the range of potential investors and makes Eurobonds less liquid instruments. However, among this practice, there are also exceptions with smaller minimum settlement amounts. For example: Turkey, 11.875% 15jan2030, USD (US900123AL40). The minimum settlement amount for this security is $ 1,000. There is also an example with an even smaller minimum amount - Russia, 7.5% 31mar2030, USD (XS0114288789), for which the minimum settlement amount is only 1 US dollar. To increase the demand for Eurobonds in the last few years, brokers have begun to split large minimum settlement amounts and offer them to their clients.

It is also important to pay attention to the conditions of brokerage services in a particular company. There are cases when an investor cannot buy the minimum settlement amount, because his broker has restrictions on the minimum order size, which may be higher than the minimum settlement amount for a specific bond.

Information about the minimum settlement amount of a particular bond is displayed on its page in the “Issue Information” block under the “Nominal” heading.