Here are the answers to some questions we’re often asked.
A bond is an agreement between a company and an investor. In return for an investment, the company agrees to pay the investor a fixed rate of interest, as well as returning the capital at the end of the agreed period. The Minerva Bond is one of a series of loan notes issued by Minerva Lending plc as part of a Secured Note Programme to be listed on the Main Securities Market of the Irish Stock Exchange.
This Minerva Bond offers up to 7% gross interest per annum for a fixed term of up to five years from the initial opening date of the offer. The interest payments (known as a ‘coupons’) are paid every six months. The investment is secured against loans made by Minerva Lending, which will be made in line with the stringent procedures and restrictions placed on us as a result of our listed status on the Irish Stock Exchange.
The Minerva Bond is secured against a portfolio of cash and loans which belong to Minerva Lending plc. In turn, the loans we make are secured against assets. This means we have a ‘charge’ (or control) over a Borrower’s assets, should they default on their repayments. Typical assets include commercial and residential property, receivables, stock and work-in-progress, chattels, insurance contracts, and securities. In this way, your investment is asset-backed. However, there is no guarantee that in the event of a default the realisable value of the assets will be sufficient to ensure repayment of your investment in full and, as result, your capital is still at risk.
A bond, first and foremost, is a form of borrowing by a company that wants to raise funds from investors. In plainer English, think of a bond as a corporate IOU.
Importantly, bonds have a fixed maturity date and the issuer of the bond promises to pay a fixed rate of interest to the investor until the date that the bond matures, at which point the issuer promises to repay the amount borrowed. In the case of the Minerva Listed Bond, the interest payable is 7% gross per annum.
A listed bond is similar to any other bond but it is simply one that is ‘listed’ on a Stock Exchange. The Minerva Listed Bond, for example, is listed on the Irish Stock Exchange (ISE).
The ISE is one of the leading global centres for listed debt securities, ranking at #2 among global exchanges, according to rankings released by the World Federation of Exchanges (WFE) at the end of December 2016.
Note that listed bonds are transferable and investors have the ability to trade them should there be interested buyers.
Also, because it’s listed, the Minerva Listed Bond has been subject to extensive regulatory listing checks and stringent third party corporate governance.
While all bonds have certain similarities, they are not all the same, carry different risks and are often structured differently. It’s impossible to compare all bond types here but the important thing is that people fully understand the structure of the bond they are considering investing in and all associated risks.
The minimum investment is £1,000 (equivalent to 1000 units at nominal £1 per unit invested; actual price invested will be dependent on the accrued interest at the time of purchase), rising in multiples of 1,000 units thereafter. You can invest as much as you like during the offer period, providing it is in multiples of 1,000 units
Anyone over the age of 18 or a trust, company or charity that is not prevented by the laws of its governing jurisdiction from applying for or holding Minerva Bonds. It’s important to understand that capital is at risk with listed bonds and investors may not receive back the full amount of their investment. The Minerva Listed Bond is not covered by the Financial Services Compensation Scheme. Investors need to be fully aware of these risk and, if necessary, should seek advice from an independent financial adviser. Listed bonds would typically represent a small part of a broader portfolio. Whether someone invests will typically depend on their appetite for risk and financial goals and circumstances.
Bonds such as Minerva Bonds are usually available in a series. The offer period is the length of time this particular Minerva Bond is available. Once the offer period is closed, you’ll only be able to buy Minerva Bonds through the Irish Stock Exchange, although further Minerva Bonds may be issued at a later date.
Yes, depending on the time period you choose, interest on Minerva Bonds is paid at a fixed rate of up to 7% per annum, paid every six months for up to five years from the initial opening date of the offer.
Yes, you can top up your holding in 1,000 unit increments (1000 units at nominal £1 per unit invested equal to £1,000. Actual price invested will be dependent on the accrued interest at the time of purchase) at any point during the offer period. There is no maximum limit. However, you should think carefully before investing a significant percentage of your total assets in fixed income products such as this offering.
You can invest via the website, www.minervalending.co.uk. Alternatively, you can invest by filling in the appropriate forms offline and making a bank transfer or you can contact the Minerva Helpdesk directly on 0203 963 5970.
Not from us. Your financial intermediary or stockbroker may charge fees and/or commission for any Minerva Bonds you buy or sell through them.
Your investment will be held by Third Platform Services on your behalf who are authorised and regulated by the Financial Conduct Authority FRN 717915. Alternatively, you may nominate another custodian who is able to hold the Bonds on your behalf.
With any type of bond, including the Minerva Listed Bond, capital is at risk and investors may not receive back the full amount of their investment. The Minerva Listed Bond, like most other bonds, is also not covered by the Financial Services Compensation Scheme. A level of protection is provided, however, by the facts that the loans within the bond are ‘asset-backed’ and are made at a maximum loan to value of 70%. This effectively provides a minimum 30% buffer before capital is put at risk. Funds invested in the Minerva Listed Bond will also be spread across a number of loans, providing in-built diversification and thus further protection for investors. Crucially, the loans made are underwritten by an independent credit committee, which carries out extensive checks on all borrowers and securities. It’s is also worth noting that Minerva will only invest in British/EU-based companies, which minimises exposure to exchange rate volatility.
The returns available from different classes of bonds will vary significantly depending on the nature of the investments held within them. Generally speaking, the greater the potential return, the greater the level of risk. The Minerva listed bond offers returns up to 7% p.a.
You are scheduled to get your investment back at the end of your chosen investment period.
Different bonds will carry different risks and people should fully understand those risks before investing. Where necessary, seek independent financial advice.
Yes. Because Minerva Bonds are traded on the Irish Stock Exchange, they can be included within a stocks-and-shares tax-free ISA. They are also eligible for Self-Invested Personal Pensions (SIPPs). However, please check with your SIPP provider, as all investment into your SIPP must be pre-approved by the SIPP provider.
Quoted corporate bonds, such as the Minerva Bonds, can be traded through the ISE (Irish Stock Exchange) provided a secondary market is available. This type of bond is also suitable for investment to be held in an ISA, whereas other types of unlisted bonds may not qualify for this type of treatment.
It depends on your individual circumstances. Please talk to your financial advisor.
Minerva Bonds are listed on the Official List of the Irish Listing Authority and can be bought and sold on the Main Securities Market of the Irish Stock Exchange. This gives you access to a secondary market in which to sell your bonds. You can decide to sell your bonds at any time.
As with any investment, there’s always a risk that you may not be able to sell the bonds easily or you may get back less than you initially invested.
The Irish Stock Exchange plc (ISE) is a public company and a recognised investment exchange under UK law. It has a duty to ensure that dealings in securities admitted to its markets are conducted in a proper and orderly manner. Listed companies therefore have to meet requirements set out in its Admission and Disclosure standards and undergo extensive regulatory and compliance checks.
The ISE is regulated by the Central Bank of Ireland under the Markets in Financial Instruments Regulations (MiFID), and is a member of the World Federation of Exchanges and the Federation of European Stock Exchanges.
Over 33,000 securities issued by 4,000 organisations from 80 countries around the globe are listed.
Given the results of the UK referendum in 2016, listing the Minerva bond on an English-speaking European-based exchange is a strategic decision to insure against any volatility which might arise from the UK’s withdrawal from the European Union.
Interestme is a trading name of EGR Broking Ltd (EGR). EGR is the investor’s agent in making the application and is Regulated and Authorised in the UK by the Financial Conduct Authority (FRN 537582).
EGR will issue a contract note to show bonds have been successfully allotted. They will open and maintain a platform account for investors to hold purchased bonds within CREST. An annual custody charge of 0.3% of the face value of the Bonds will be payable. Investors may also hold the Bonds with their own broker, if required.
The Minerva bonds are issued in Series and the closing date is the agreed maturity date for each Series, so for example the Series 9 closing date is June 2022.
Minerva Lending plc is the issuer of the bonds. It is therefore sometimes referred to as the "Issuer".
When we refer to "Notes" we are referring to the "Bonds" and this is an inter-changeable definition through the website and documentation.
U.S. Bank Trustees Limited, a business authorised and regulated by the Financial Conduct Authority (No 462132) has been appointed to act as the Issuer Security Trustee, and will act where required in the interest of investors. This provides you with the peace of mind that there is an independent third party to administer the loans and security in place in the interests of investors should anything adverse happen to Minerva.