When you sell your investment on the Secondary Market, you can do it at a premium, at par, or at a discount.
At par
At par (0% discount/premium) means that an investment with an outstanding value of € 100 will be available to other investors to purchase for € 100.
At a premium
- The investment will be available to other investors at a price that is higher than the outstanding value. Example: If the outstanding value is € 100 and the premium is 5%, the investment will be available for € 105.
- The seller can make a profit when the investment is sold at a premium.
- The buyer should consider if the premium is acceptable when looking at the forecasted return on the investment.
At a discount
- The investment will be available to investors at a price that is less than the outstanding value. Example: If the outstanding value is € 100 and the discount is 5%, the investment will be available for € 95.
- The seller can potentially access their money faster, or exit a late loan.
- The buyer should consider if the risk is acceptable when looking at the loan details and forecasted return on the investment.