- This topic has 1 reply, 1 voice, and was last updated 3 months, 4 weeks ago by .
- You must be logged in to reply to this topic.
I read/watched with interest your material on Retail Charity Bonds https://goodmoneyguide.com/investing/retail-charity-bonds/
I am trying to assess how risky the investments are. One question I have is how the charities raise the money to pay back the principal. Do they just issue new bonds ?
If you are able to point me to further information, I’d be grateful. The RCB website does not seem to address this matter – indeed, as a private investor, I was not sure who to approach in RCB.
Thanks for your question. Mark Glowreyββββ, Director of Fixed Income Sales at Allia C&C has provided us with the below:
Allia C&C are lead managers of the RCB program and whilst we are unable to provide investment advice or predict future events we can provide some insight on the likely behavior of the borrowers.
As your reader rightly surmises, many of the charities issuing bonds will look to refinance the debt on or before maturity. This has already happened with one issuer, Golden Lane Housing, who issued the first bond on the program in 2014. When the bond matured in 2021 the first bond was repaid from proceeds from newly issued ten-year bond.
Other issuers may choose to re-finance the debt via further bond issuance. Many of the issuers run balance sheets with multiple lenders such as banks, and may chose alternative methods of refinance (largely subject to the relative cost of debt). In some cases, the debt may be repaid from retained earnings.
Quickly compare vetted accounts to see which providers are most appropriate for you.
Get a better understanding of how the markets work with our easy to ready "how-to" guides.
See what customers and industry experts think of providers with our reviews and rankings
DISCLAIMER:Β The information contained in this website is for informational purposes only and does not constitute financial advice. The material does not contain (and should not be construed as containing) investment advice or an investment recommendation, or, an offer of or solicitation for, a transaction in any financial instrument.
AFFILIATE NOTICE: Some of the links on Good Money Guide are affiliate links. This means that when you click through from us to a provider and open an account we may receive a payment. See about us for more information on how we make money and how we test providers.
RISK WARNING:Β ALL INVESTING INVOLVES RISK. Investing, Derivatives, Spread betting and CFD trading carry a high level of risk to your capital and can result in losses that exceed your initial deposit. Between 68-89%Β of retail investor accounts lose money when trading CFDs and spread bets. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Capital at risk.
All content copyright Good Money Guide. GoodMoneyGuide.com is owned and operated by RJBCO Ltd. Registered in England & Wales, Company Number: 07134687. Registered office at 4 Old Park Lane, Mayfair, London, England, W1K 1QW. VAT registration number: 324242143. Data protection registration number: ZA468875