Asset-Backed Bonds
A type of loan secured against a company or asset in return for a fixed rate of interest over a defined period
Business Nature
Bonds that are backed by UK real estate provide the highest level of security, protection, and stability. They are underpinned by an asset that retains value, appreciates, and is in high demand.
Bond Lengths
The length depends on the availability and client requirements. However, most bonds typically range from 12 Months - 10 Years with the option to take interest annually or compounded until completion.
Yields
Interest can range from 5% - 15% per annum. However, yields usually depend on the bond’s length and the amount that is placed. Interest is generally compounded to maximize the annual rate of return.
Security
Capital is backed by physical assets in the UK and with a legal charge over the companies assets. This means in the event of a default capital may be recovered from the sale of the companies assets.
Minimum Requirements
Asset-Backed Bonds are available in a range of currencies and have accessible entry points that depend on the nature of the bond and the client requirements.
Accessibility
Bonds hold one of the most liquid secondary markets with over £421bn traded daily. Careful consideration should be given to the underlying bond to ensure capital can be accessed if required.