Post by Wisealpha on Apr 27, 2017 11:41:18 GMT
Dear all,
We’re delighted to announce we are adding a new product market to the WiseAlpha platform. From today you will be able to access the new High Yield section on the WiseAlpha market.
For those familiar with investing in unsecured Peer-to-Peer small business loans or retail mini-bonds, in our opinion corporate high yield bonds are a more attractive alternative.
Investors who complete the product questionnaire on their first bond purchase to show they understand the risk-reward in investing in these type of bonds will be able to purchase these bonds.
For those familiar with investing in unsecured Peer-to-Peer small business loans or retail mini-bonds, in our opinion corporate high yield bonds are a more attractive alternative.
Overview of High Yield bonds
What is a corporate high yield bond?
Interest payments
• Interest every 6 months
• Typically fixed rate
Capital repayments
• Capital paid back at maturity or if earlier subject to a price premium (an early repayment penalty above the face value of the bond)
• Maturities tend to be between 7-10 years
Asset security
• While senior secured bonds and loans have first ranking security over the assets of the company high yield bonds are typically unsecured obligations of the company and have junior (lower) priority in terms of repayment
• This means that in a company liquidation or restructuring event high yield bonds can carry a greater risk of lower rates of recovery on the principal amount of the bonds
• High yield bonds however do rank ahead of equity in the capital structure (see the typical borrower structure below)
Capital at Risk. Whilst no single investment has suffered a default loss on WiseAlpha past performance is not necessarily a guarantee of the future.
We’re delighted to announce we are adding a new product market to the WiseAlpha platform. From today you will be able to access the new High Yield section on the WiseAlpha market.
For those familiar with investing in unsecured Peer-to-Peer small business loans or retail mini-bonds, in our opinion corporate high yield bonds are a more attractive alternative.
Investors who complete the product questionnaire on their first bond purchase to show they understand the risk-reward in investing in these type of bonds will be able to purchase these bonds.
For those familiar with investing in unsecured Peer-to-Peer small business loans or retail mini-bonds, in our opinion corporate high yield bonds are a more attractive alternative.
Overview of High Yield bonds
What is a corporate high yield bond?
- A corporate takes out an unsecured bond from a syndicate of lenders which is sold in the international capital markets by global investment banks.
- Typically offer higher interest rates than government bonds or high grade corporates, and they have the potential for capital appreciation in the event of a rating upgrade, an economic upturn or improved performance at the issuing company.
- The high yield sector generally has a low correlation to other sectors of the fixed income market along with less sensitivity to interest rate risk, an allocation to high yield bonds may provide portfolio diversification benefits.
- High yield bond investments have typically and may continue to offer equity-like returns over the long term with less volatility.
Interest payments
• Interest every 6 months
• Typically fixed rate
Capital repayments
• Capital paid back at maturity or if earlier subject to a price premium (an early repayment penalty above the face value of the bond)
• Maturities tend to be between 7-10 years
Asset security
• While senior secured bonds and loans have first ranking security over the assets of the company high yield bonds are typically unsecured obligations of the company and have junior (lower) priority in terms of repayment
• This means that in a company liquidation or restructuring event high yield bonds can carry a greater risk of lower rates of recovery on the principal amount of the bonds
• High yield bonds however do rank ahead of equity in the capital structure (see the typical borrower structure below)
Capital at Risk. Whilst no single investment has suffered a default loss on WiseAlpha past performance is not necessarily a guarantee of the future.