Corporate bonds

A corporate bond is a debt security issued by a company and sold to investors. The backing for the bond is usually the payment ability of the company, which is typically money to be earned from future operations. In some cases, the company's physical assets may be used as collateral for bonds. Corporate bonds are considered higher risk than government bonds and you could get back less than you invest. As a result, interest rates are almost always higher, even for top-flight credit quality companies.


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Recent bond issues

Below is a list of recent corporate bond issues Beaufort has offered to clients.

Date Bond Name Details
Aug 2017 LendInvest Secured Income 5.25% 2022 Retail Bond Read prospectus
Read information booklet
May 2017 Burford Capital 5% 2026 Retail Bond Read prospectus
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Apr 2016 Burford Capital 6.125% 2024 Retail Bond Read prospectus
Read information booklet
Mar 2016 Alpha Plus Holdings 5% 2024 Retail Bond Read prospectus
Read information booklet

Risks

Corporate bonds can fall in value as well as rise and you could get back less than you invest.

Default - There is a risk that the issuer will be unable to return all or some of the capital and interest payments.

Market movements - The bond's price will fluctuate according to the balance of supply and demand in the market. If you need to sell a bond before maturity to raise funds, there is a risk of capital loss.

Issue-specific risk - Many bonds are issued with features such as "calls", which enable the issuer to repay the debt ahead of schedule. This can be disadvantageous to the investor. Such features are outlined in the bond's prospectus and investors should make sure they read this document in full prior to making an investment.

Other risks - These include a host of risks such as a shift to an unfavourable or punitive tax treatment, leveraged buyouts and the risk of inflation, which can devalue the asset over time.

If you have any doubts about the suitability of a corporate bond for your circumstances you should contact your Beaufort Securities broker.


Care is taken to ensure that the information provided is correct but we do not warrant, represent or guarantee the contents of the information, nor do we accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. The information should not be regarded as specific investment advice or a personal recommendation of any kind. Should you require investment advice you should contact your Beaufort Securities broker.