FREQUENTLY
ASKED
QUESTIONS
FAQs
What is a Corporate Bond?
A bond is simply an I O U. The Collateral Manager(s) borrow investors money with a promise to pay it back at the end of the term of the Bond. Along the way the Collateral Manager will pay a rate of interest (also known as the Coupon), in this case 8.1%. The Collateral Managers will use the investors money, until they have to pay it back, to grow their business and reach a level where they no longer need to borrow.
What is the difference between investment grade bonds and minibonds?
Junk Bonds are commonly 'disguised' as Minibonds, unsecured Loan Notes, or BB-D rated bonds. They tend to be illiquid, usually unlisted, extremely high risk and often have little to zero assets backing whatsoever, but tend to hide behind the guise of 'asset backed' in their marketing and promotion.
Investment Grade Listed Bonds on the contrary, are Senior Secured, Listed and Rated AAA-BBB, Freely Transferable to exit and sell on and categorized as Low Risk (default rates average 0.4%).
Does the Propifi Bond have a rating?
Yes, the bond has an Investment Grade A-rating from the external credit rating agency – Eurorating. Last updated in April 2024.
What does the term “senior secure” mean?
Bond Capital is secured by valid first priority perfected security on specific pre-existing collateral, also referred to as Bankruptcy Remote. Senior secured means that specific collateral has been separated and set aside against the bond capital and legally sits under charge of an independent Security Trustee, completely separate to any Issuer/Company risk.
How is my money protected with the Propifi Bond?
Propifi Investment Limited (PIL) uses the proceeds of bond subscriptions to make bridging loans. Before making a bridging loan, PIL takes security over the corresponding property, which becomes a financial collateral asset of PIL. Should the borrower default, PIL would enforce, liquidating the asset to cover the debt.
In the bond programme structure, it is important that noteholders are similarly protected, as they make loans to the Issuer in the form of subscriptions. To achieve this, noteholders' interests are represented by an independent trustee. On the behalf of noteholders, the trustee takes security over all the assets of the Issuer and all the relevant assets (the borrower loans and corresponding financial collateral assets described above) of PIL. Hence if the Issuer (Propifi Bonds plc) were to default on its obligations to noteholders, the trustee has both the authority and the means to liquidate the assets of both the Issuer and the assets of PIL (the bridging loans made and the collateral taken) to cover debt to noteholders.
Who is the trustee looking after the interests of the bond holders?
Truva is an independent trustee representing the interests of the noteholders.
Truva is a group of companies that provide corporate trustee and corporate administration services for bond programmes to ensure that appropriate security is taken in the interests of noteholders.
The share capital of the Issuer is 100% owned by Truva Share Trustee Limited (TSTL). TSTL is entirely independent of Propifi. It is part of the Truva Group, all of which is owned by Truva Services Limited which is owned solely by its directors.
How regularly is my coupon paid?
The bond coupon is paid biannually (every 6 months). The Coupon Announcement lodged with the London Stock Exchange each time coupon payments are made.
Has Propifi ever missed a Coupon payment?
No, the coupons have been paid in full and on time since first issuance in 2020.
How much is Propifi looking to raise?
The raise is capped £5 Billion, however Propifi release the bond series in tranches of £300 Million.
What is the minimum investment amount?
£100,000
In what currency is the bond available?
We have a bond series available in GBP, USD and EUR.
What is "Dirty Pricing"?"
A dirty price is a bond pricing quote, which refers to the cost of a bond that includes accrued interest based on the coupon rate. Bond price quotes between coupon payment dates reflect the accrued interest up to the day of the quote.
A dirty bond price includes accrued interest while a clean bond price does not. Clean quotes are typical in the United States, and dirty quotes are standard in Europe.
Can I trade out of my 5 year, fixed income bond early?"
Propifi Bonds Plc are responsible for new bond issuances only and are not involved in the secondary market.Bonds are income-bearing investments that trade freely in the open markets. This sets them apart from other types of investments, such as bank certificates of deposit, which trigger a penalty for being sold early. Although you're able to sell a bond anytime if there's a willing buyer, many bondholders choose to wait until the bond matures to give it up, thus maximising their return on investment.
The Propifi Corporate Bond is listed on the Boerse Frankfurt Stock Exchange and as such, you can trade out of your 5 year investment early should you wish.
It is important to consider that when you sell your bond before the maturity date, you'll have to pay a broker fee for the service. This charge isn't strictly a penalty because it can vary from broker to broker. However, the effect is the same - you'll end up with less money if you sell your bond early, as it doesn't cost anything at all to let your bond mature.
Find out more about our corporate bond