The Lemon Fool

Possibly not right for this board so please suggest a move (couldn't find the 'A Fool and His Money' equivalent)

This bond was advertised on this very site, up the top ^^^^
I clicked through out of interest.
https://www.primeukinvestments.co.uk/pu ... gInGPD_BwE

So;
5 - 9% P/A Return
Income guaranteed by UK Government for the next 20 years
Fully Asset Backed and Underwritten for any loss of income
FCA Regulated bond administrator acting in bondholders interest

9% guaranteed. Current risk free rate is...what, around 1%?


What gives?
Are they just lying about the Government guarantee?
54 Fenchurch street, London, EC3M 4BE looks like serviced offices.
The 5-star Trustpilot link doesn't work...
The T&Cs bottom left link state;
"...This Website is not authorized and regulated by the FCA and that clients who proceed to purchase investment products will not have access to the Financial Ombudsman service or the financial services compensation scheme."

From the website

Any marketing promotion on this website is specifically not directed to clients in the UK other than Exempt Investors and Self-Certified Restricted, High Net Worth or Sophisticated Investors.

It's the London Capital Finance loophole again. Probably the same type of investment as well.

It’s a feed in tariff trade.

They don’t say the bonds are government guaranteed. They say the sector (renewables) is government backed.

My bet is that this is a mezzanine bond lending to a renewables project. The project will be receiving government backed cash flows but a senior lender will have first priority over them.

Invest at your own risk. Usually in those kind of structure you either want to be the equity with the upside or the senior debt with the security. I wouldn’t touch it.

Spet0789 wrote:They don’t say the bonds are government guaranteed. They say the sector (renewables) is government backed.

My bet is that this is a mezzanine bond lending to a renewables project. The project will be receiving government backed cash flows but a senior lender will have first priority over them.

Invest at your own risk. Usually in those kind of structure you either want to be the equity with the upside or the senior debt with the security. I wouldn’t touch it.

My thoughts exactly. No guarantee for these bonds, only for part of the project.

If they are offering 9% for 5 years when 5 year gilts are yielding just 0.59% according to Bloomberg, that is quite a bit of risk.

https://www.bloomberg.com/markets/rates ... t-bonds/uk

For those of us who are old enough to remember the original "Lost in Space", a warning

https://m.youtube.com/watch?v=OWwOJlOI1nU

I'm afraid that, since the following, I have kept my browser on Ad-Block for TLF:

viewtopic.php?f=21&t=17173#p214022

Spet0789 wrote:
They don’t say the bonds are government guaranteed. They say the sector (renewables) is government backed.
...
..

They almost do;
"Income guaranteed by UK Government for the next 20 years"

Obviously I'm not going anywhere near them , they smell worse than Rick Stein's bin.
I wonder what happens to people who apply for the information pack?

That statement will refer to the feed in tariff income to the scheme, not to the cash flows investors receive on their investment. I doubt their outright lying but they’re doing their best to mislead without doing so.