What you need to know about corporate bonds

At The Bond Register, we offer new issue, fixed-rate corporate bonds to UK residents above the age of 18.

We help grow and protect your savings with support on investments, inheritance tax or asset planning with the help of wealth managers, solicitors and accountants.

The Bond Register offers a range of asset-rich company bonds that we can connect you to through our quick and easy application process.

Known maturity date  Fixed term  ISA eligible  GIA eligible  Lifetime ISA eligible (from April 2017)
Supporting UK businesses  Asset backed  Backed by debentures  Fee free – ISA

What is a corporate bond?

Corporate bonds are issued by companies as a means of raising money for the business. It is a simpler and cheaper alternative for a company to list a bond than to borrow from a bank. A wide range of companies, institutions and governments have been issuing bonds traded on stock markets for years.

Why invest in a bond?

Bonds have a projected fixed term and interest rate, you are lending money to a company in return for the interest payment (usually annually, bi-annually or quarterly) and your full investment being returned upon maturity. The interest can be paid directly into an ISA therefore you pay no tax on the initial investment or interest gained allowing you to form a steady income or watch your investment grow.

The benefits of corporate bonds

Investing in corporate bonds has many advantages, for example their predictability due to them having fixed interest returns. Each bond has a fixed term and a known maturity date. Since you know when to expect your interest each year and when your initial investment will be returned, bonds are a great opportunity for those looking for a steady stream of revenue from their savings, eg) the retired. However, like any other investment there are risks (please see below).

Bonds typically have higher fixed interest rates. The bonds we list range from 6.5% to 8.75% interest per annum compared to 0% – 1% from most UK banks.

The bonds that we offer are SIPP, General Investment Account (GIA), ISA and Lifetime ISA eligible so why not make your money work harder for you and boost your underperforming cash ISA?

In this time of global political uncertainty, we believe the promotion of the UK economy is valuable opportunity for potential investors. Therefore we choose to mainly promote bonds that contribute to the expansion of a variety of UK businesses.

Your security is important to us therefore we promote both asset backed bonds and bonds secured by debentures, this puts you as the bondholder in a better position in the event something goes wrong.

The risks of bonds

You will have seen that the rate of interest on corporate bonds is significantly higher than that of UK high street banks. This is due to the higher risks of corporate bonds in comparison to cash deposits. Corporate bonds are not usually covered by the Financial Services Compensation Scheme and investors are dependent on the bond-issuing company staying solvent.

Credit risk (also known as issuer risk or default risk)

The issuer may not be able to meet its obligations in terms of coupon payments, or may not be able to repay the initial investment back to the bondholder at maturity.

Market risk

Bonds are a medium to longer term investment and they have a fixed term. If you want to sell the bond early, you must be aware of market risk. Between its issue and maturity date if the bond was to be worth less, there is a risk that the full capital invested will not be returned. With smaller companies it can be difficult to sell a bond without delay or at a cost. Sometimes, when others are trying to sell their investments, there may be simply no buyers available. Market risk does not apply if you wait until the bond’s maturity date.

Interest rate risk

If bank base rates rise to 6% and cash savings rates are paying 4%, your bond fixed at 5% may not look as attractive as when you bought it.

Tips to reduce risk

• We carefully vet all bonds shown on our register to ensure the company has good prospects for success, therein reducing the risk of credit risk. However, this cannot be entirely guaranteed.

• Asset backed bonds- this offers the bondholder increased security if anything happens to the issuing company. If the bond issuer has security on its assets, the assets can be sold to repay the initial investment you lent.

• Each bond we promote has an Independent Security Trustee who checks that the directors of the company issuing the bond are acting as promised. The Trustee can also take control of the company if needs be, ensuring that your money is in safe hands.

• Spread risk by investing in a variety of bonds.

• Market risk does not apply if you hold the bond until maturity.

• It is important to read the factsheets and bond literature of the companies you are thinking of investing in. These are available on each entry of the current bonds that we offer

• Moreover, you can educate yourself on bonds by requesting a free bond brochure by post, contacting us at 0161 826 2707 or simply email us at info@thebondregister.co.uk

How can I buy a bond?
  1. Take a look at the bonds that we offer currently listed on our website. You can read and download a factsheet for each individual bond to help you decide which you are interested in investing in. We recommend reading the additional literature available on each bond listing to help in your decision.
  2. Complete the short application form.
  3. You will receive a phone call from us. We will need your National Insurance number and bank account details to conduct an electronic ID check.
  4. We will arrange a secure courier to visit you to sign any documents required to complete your application.
  5. If your funds are held in a current account and you are therefore starting a new ISA, we will provide the details of your ISA account number and where to transfer the funds. If you wish to transfer your existing ISA, we will provide a form for you to sign and we will request the transaction on your behalf.
Why choose TBR?

We are flexible and let you self-select exactly where you want to invest your money.

We offer a wide range of investments with interest rates typically higher than the banks.

TBR believe in every product we promote; vast due diligence has been done to only offer the best products

As a company we charge no fees, however ISA manager charges will apply.

Money raised from most of the bonds we promote go to the expansion and growth of UK businesses. We believe the promotion of the UK economy is a valuable opportunity for potential investors right now.

Your investments security is important to us therefore we promote both asset backed bonds and bonds secured by debentures, this puts you as the bondholder in a better position in the event something goes wrong.

Risk Warnings

1. Some investments are speculative and will fluctuate in value, and therefore, carry some degree of risk. It should not be assumed that the value of investments will always rise. Past performance will not necessarily be repeated and is no guarantee of future success, and there is a chance that you will lose both the associative capital and accumulated interest of your investment. Whilst we can guarantee fixed interest rates, we cannot guarantee fixed outcomes.

2. Bonds traded in the secondary market, can fluctuate in price in response to changing interest rates, credit quality, general economic conditions, and supply and demand. By reason of these fluctuations, the value of a bond will likely be higher or lower than its original face value if you sell it before it matures. As a result, however, there is a risk that the value of your investment may be lower than the original capital value. Please note that there is no guarantee that you will find a buyer on the secondary market were you to sell your bond investment prior to maturity.

3. Our corporate bonds are all asset-backed, however, whilst this does increase the security of the investment it does not nullify the risk of default. The value of the securitised asset connected with the bond will be divided-up between all eligible creditors, and may not wholly remunerate original capital value plus any accrued interest you are entitled to. It is good practice to ensure you are aware whether the asset-backed security is allocated either pro rata or sequentially, as this may affect the amount of remuneration you receive.

4. It is advisable that you conduct your own research into the companies which The Bond Register seeks to promote; although our firm conducts thorough background checks on all companies and their affiliated directors, we are not always able to source all relevant public information about the firm.

5. You should carefully consider in the light of your financial resources, as a means of determining whether investing in bonds is suitable for you or not. Your own personal circumstance and the impact of any successful or failed investment will always differ

6. We have a documented policy of Treating Customers Fairly and use our best endeavours to avoid any conflict of interest arising. Where conflicts of interest do arise however, we ensure fair treatment to all our customers by disclosure, internal rules of confidentiality, or otherwise.

7. The Bond Register (including its parent company and its subsidiaries, their directors, officers or employees) may have or previously held a material interest in the company which is the main subject matter of the research note or any other company mentioned, and may be providing or have provided within the previous 12 months, significant advice or investment services in relation to any company or a related company referred to in this document or any other associated document. This document has been prepared and issued by The Bond Register on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst all reasonable care is taken to ensure that the facts stated are accurate and the opinions given are fair and reasonable, neither The Bond Register nor any director, officer or employee shall in any way be responsible for its contents. This document is intended to provide clients with information and should not be construed as an offer or solicitation to buy or sell securities.

8. Diversification. The Bond Register advises that you do not ‘put your eggs in one basket’ and diversify your investment portfolio to minimise risk. This means that although you can potentially have higher returns by investing more capital into a single bond, your risk exposure is greater if that bond defaults. It is advisable to diversify your capital investment into different bonds.

9. Please note that there is no protection from the Financial Services Compensation Schem

Helpful terms

Asset backed
The money raised has been secured on assets like property.

ISA Eligible
Investments made with corporate bonds can be held in an ISA and therefore any interest and capital made is tax free. Similarly, our bonds are SIPP eligible and GIA eligible.

Maturity Date

The date on which your initial investment is paid back in full.

ISA (Individual Savings Account)
A scheme allowing individuals to hold cash, shares, and unit trusts free of tax on dividends, interest, and capital gains.

GIA (General Investment Account)
A simple way to hold investments outside of tax wrappers such as pensions or ISAs. They do not offer tax relief, but have few limitations.

SIPP (Self-Invested Personal Pension)
A pension plan that enables the holder to choose and manage the investments made.

Lifetime ISA
You can save up to £4,000 a year either as a lump sum or by putting in cash when you can. The state add a 25% bonus on top. The fund can only be used to buy your first home or for your pension (terms and conditions apply).

ISA Eligible
Investments made with corporate bonds can be held in an ISA and therefore any interest and capital made is tax free. Similarly, our bonds are SIPP eligible and GIA eligible.