A reader asks: 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.
Our response: Thanks for your question. Mark Glowrey
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.
Richard is the founder of the Good Money Guide (formerly Good Broker Guide), one of the original investment comparison sites established in 2015. With a career spanning two decades as a broker, he brings extensive expertise and knowledge to the financial landscape.
Having worked as a broker at Investors Intelligence and a multi-asset derivatives broker at MF Global (Man Financial), Richard has acquired substantial experience in the industry. His career began as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson), following internships on the NYMEX oil trading floor in New York and London IPE in 2001 and 2000.
Richard’s contributions and expertise have been recognized by respected publications such as The Sunday Times, BusinessInsider, Yahoo Finance, BusinessNews.org.uk, Master Investor, Wealth Briefing, iNews, and The FT, among many others.
Under Richard’s leadership, the Good Money Guide has evolved into a valuable destination for comprehensive information and expert guidance, specialising in trading, investment, and currency exchange. His commitment to delivering high-quality insights has solidified the Good Money Guide’s standing as a well-respected resource for both customers and industry colleagues.
To contact Richard, please ask a question in our financial discussion forum.
