The Absolute Return Bonds are the first from the Chiltern BondCo Ltd’s family of subsidiaries, and enable investors to target inflation-beating returns.
- ISA eligible
- Fee free*
Since the financial crisis, cash savings accounts have returned an average interest rate of less than 0.5% per year, below the prevailing level of inflation, which is currently at 2.3%.
While The Absolute Return Bonds may offer a higher rate of return than cash savings accounts that do not have risk associated with them, please be aware that the bonds are investment products and Your Capital Is At Risk.
Earn 3.85% p.a.
The 1 year bond targets returns of 3.35% p.a and the 3 year bond targets returns of 3.85% p.a. Both are ISA eligible so returns can be received tax-free**.
Returns are delivered by way of a hand-selected lending portfolio, which comprises loans, receivables and loan investments, benefiting from security against residential and commercial property in the UK.
The Absolute Return Bonds I & II were issued on 1 October 2018
You may still apply for the bonds but the amount of interest received will be calculated from the time of purchase to maturity.
Bonds were issued on 1 October 2018
The Absolute Bonds I and II were issued on 1st October 2018. You may still apply for the bonds but your investment will begin only when funds are received and used to purchase bonds. The amount of interest received will be calculated from the time of purchase to maturity.
The Absolute Return Bond I and Absolute Return Bond II are ISA eligible investments, allowing you to earn tax free interest on your investment.
Tax treatment depends on your individual circumstances and may be subject to change.
The Chiltern Family of Bonds may be eligible for inclusion within your SIPP or SSAS. Please discuss with your pension administrator.
The following fees apply for IF ISA subscribers:
- Open account: £0 (nil)
- Close account: £50
- Transfer-out: £100
The bonds offer an interest rate in excess of the current rate of inflation, to seek to enable you to preserve wealth and generate a positive return.
The bonds are complementary to existing investment allocation strategies and designed to sit well with a traditional investment portfolio.
Proceeds raised from the Absolute Return Bonds will be provide to Chiltern BondCo Ltd to create a Lending Portfolio.
Equity Cushion. Chiltern BondCo Ltd. will grow and maintain an Equity Cushion, to seek to absorb losses that may occur in the Lending Portfolio. The target equity cushion will be set at 2.0% of the total funds in the bond.
The Absolute Return Bond I bond and the Absolute Return Bond II bond are Fixed Term Bonds, which target a fixed interest rate on your investment for a set period of time.
The Lending Portfolio will predominantly comprise loans, receivables and loan investments, benefiting from security against residential and commercial property in the UK.
Please be aware that although onward loans benefit from security, this does not guarantee a return of bondholder interest and capital.
The Lending Portfolio will be hand-picked by an experienced team of investment and credit professionals, which includes the key personnel that created and managed an analogous pool of assets held by BondMason since 2015.
Fee Free. There are no subscription or management fees payable by Investors in the bond. Please note: there may be fees payable with respect to closing or transferring out funds from an ISA account.
Capital is at Risk
The 3-year Absolute Return Bond has a coupon of 3.85% p.a.; the 1-year Absolute Return Bond has a coupon of 3.35% p.a. Capital is at risk. The value of investments may go down as well as up and you may not get back the original amount invested. The name Absolute Return Bond does not mean returns are guaranteed.
Fees will apply for investors subscribing through an IF ISA. No other fees are payable. The tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
This website page is a summary marketing document created to provide an investor with headline information in relation to The Absolute Return Bonds and their purpose. This website page must be read in conjunction with the Information Memorandums specific to the two bonds which provides more details of the offerings along with associated risks. The Information Memorandums can be downloaded from this website page. An investor must be aware of the particular risks involved in this offering and must make a decision that applies to their personal circumstances.
This website page is for information purposes only and does not constitute investment advice. For investment advice, please contact a professional Financial Adviser.
Investment in the bond may offer a higher rate of return, but it is likely to be harder to transfer/sell your investment than if you were using a savings account. You should review this before making any decision and read the risk section of the IM fully before proceeding any further.
Investing in bonds is risky. Your capital is at risk, and if the Lending Portfolio does not create a sufficient level of return, then the Issuer and Chiltern BondCo may not have sufficient financial resources to satisfy the full repayment of capital and interest at the end of the bond. There may also be other, unforeseen circumstances which could provide uncertainty as to the outcome of the bond.
* The fact that lending is property backed doesn’t guarantee all capital would be repaid. This also means that there is a liquidity risk in respect of the bond and there is likely to be a delay in repaying your capital should you request it.
** Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
This website page is a joint promotion that has been issued by Absolute Return Bond I Ltd and Absolute Return Bond II Ltd, both trading as The Absolute Return Bond, The Absolute Return Bonds and Chiltern BondCo. Absolute Return Bond I Ltd and Absolute Return Bond II Ltd are the names of the bond issuing entities, issuing 1 year and 3 year bonds respectively. Absolute Return Bond I Ltd & Absolute Return Bond II Ltd: Registered Address Unit 4, Kinsbourne Court, Luton Road, Harpenden, Hertfordshire, AL5 3BL. Registered in England and Wales. Absolute Return Bond I Ltd Company Number: 11489122. Absolute Return Bond II Ltd Company Number: 11489199. This website page has been approved for the purposes of Section 21 of the FSMA by Northern Provident Investments Limited
Capital At Risk
Availability is limited and is restricted to certain investor types.
1. Open your online account with BondMason.com.
We require that you verify your identity prior to opening an account; therefore, please have either your driving licence or passport number to hand when completing the online sign-up form.
2. Apply for your Absolute Return Bond(s)
3. Your step-by-step guide
Please see our FAQs or contact us at email@example.com. If you have any questions about the BondMason account registration process, please contact the team on 01582 802 000 or firstname.lastname@example.org. Please note we cannot give financial advice.
The Absolute Bonds I and II were issued on 1st October 2018.
You may still apply for the bonds but your investment will begin only when funds are received and used to purchase bonds. The amount of interest received will be calculated from the time of purchase to maturity.