Bonds Guide

Bonds explained

A bond is a loan issued by companies and governments to raise money. If you buy a bond, you’re giving that company or government a loan that they agree to pay back to you on a specific date – essentially an IOU – with added interest. As investing in bonds carries an element of risk, investors are rewarded with higher returns than cash savings.

Bond benefits

Bonds offer significant growth opportunities. A diversified bond portfolio can provide reliable yields with less volatility than equities, and with a higher income than savings accounts. Fixed-rate, fixed-term bonds are a great advantage to any investor as you can plan your finances around when your interest is due.

Types of bond

Bonds come in different forms and the bond market can be confusing.

• Government bonds such as those issued by the UK Government (also called ‘gilts’) are used to finance public spending. Since 2008, these types of bonds haven’t performed very well sometimes even producing negative returns.
• Bank saving bonds issued by traditional banks are used to finance bank lending, often against property. These are generally very low returns similar to savings accounts.
• Corporate bonds are issued by companies such as Propiteer Capital PLC as well as many other household names. These normally offer a higher return due to being used to grow the company and deliver greater company profits. When these companies make their bonds ‘listed’ they can then also be traded on stock exchanges.
• Mini bonds are unlisted products and can’t be traded on an exchange, consequently, are considered by the FCA to be higher risk. They are seen as an alternative to corporate and government bonds, but don’t have the same flexibility as other bond types.

The Propiteer Capital’s listed bond

At Propiteer Capital PLC, our bond is ‘listed’ on leading pan-European authorised stock exchanges such as London, Vienna, and Frankfurt. This is what we refer to when we talk about our ‘listed bond’. You agree to commit funds at a fixed rate of interest, for an agreed period of time, after which your funds are returned. The bond you have purchased is listed on a regulated stock exchange.

Fixed-rate bond

The Propiteer Capital Property Bond is 'fixed-rate', which means the interest you receive is the same for the entirety of the term of your investment. With predictable returns you get peace of mind, and you can plan your financial goals accordingly. With our bond, you also have the added benefit to continue on your current interest rate at redemption if the markets have declined.

Bond security

When investing in bonds, it’s always a good idea to check what the bond debt is secured against. For Propiteer Capital PLC, our bond has security normally taken against land or company shares for each project. This means we have a secure and transparent process in place that puts you as the first creditor we pay back.

Withdrawing your funds

With Propiteer Capital’s fixed-rate bond, you can withdraw as soon as you hit the Early Redemption Period, which varies depending on the details of the bond you’ve invested in. If you’re unsure of how to withdraw in your Early Redemption Period, contact our customer services team who’ll be able to advise you on the steps you need to take for withdrawal.