Fractional Bonds FAQ
We have recently shared the news that Fractional Bonds are now available on Mintos. If you have any questions about the bonds issued by Eleving Group, here’s your chance to ask away. Representatives from Mintos and from Eleving Group will be chiming in with their responses.
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Hi,
How the price of the bonds issued on the market will reflect on the fractionned product proposed on mintos ?
For exemple if the price of the bond on the Frankfurt Stock Exchange drop to 90. How investors will see their investement at the time ? Mark to market of face value ?
Eleving group can profite of this situation and rebuy the bonds at any moment resulting in a loss for the investor without noticing (If face value).
Regards,
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Can you say something on how risk of Eleving bonds compares to Eleving loans on the Mintos platform? What is the seniority.
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How long will the fractionnal bond will be available? The public offering end at the end of the month. Is mintos have engaged 3 millions no matters how much investors at mintos will fund and in fine the fractionnal bonds will be available until maturity?
Is there a bigger benefit to buy enough fractionnal bonds to get equivalent to 1 bond (or 10) ?
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Hi Nicolas Mayer and Folkert,
thank you for your inquiries. In response to the first question. It is not planned that the Bonds obtained by the issuer are sold before maturity and thus should not be exposed to market price movements. Only if the Eleving group exercises the call option, the bonds be redeemed before the maturity date, and in turn Notes will be redeemed. However, that will happen at a predetermined exercise price as per terms and conditions of Eleving Group prospectus, which will be above or at par. As for further questions, we will address them shortly.2 -
How does Mintos benefit financially from offering the fractional bonds with the same interest rate as the underlying bonds? It would make sense if Mintos SPV gets a better interest rate or some kind of commission fee from the bond issuer for subscribing...
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Folkert, thank you for your patience. In response to your question: Can you say something on how risk of Eleving bonds compares to Eleving loans on the Mintos platform? What is the seniority.
At present, Eleving offers investment opportunities through Notes supported by loans and Fractional Bonds available on the Mintos platform. The term 'Notes backed by loans' pertains to the performance of the underlying loans, primarily with respect to the loans issuer, except in cases where the company repurchases the underlying loans. On the other hand, the performance of Bonds is intricately linked to factors such as the financial condition, corporate actions, and macroeconomic environment of the Bonds Issuer, which may not be the same entity. All these considerations are duly outlined in the prospectus for both financial products under the section concerning Risk factors.
Furthermore, as specified in the prospectus, each of these underlying products operates under distinct transactional structures, involving different issuers and, consequently, distinct security packages. When considering seniority, it's important to evaluate Bonds from the perspective of the Bonds Issuer (Lux entity), whereas for Notes backed by loans, seniority must be assessed based on the creditors list within the Lending company.
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Nicolas Mayer
In response to your further questions:
1. How long will the fractional bond be available?
- Eleving bond offer will be available until 25.10.2023. 23:59 to place investment, so it is limited time offer.
2. Is Mintos have engaged 3 millions no matters how much investors at Mintos will fund and in fine the fractional bonds will be available until maturity?
- As explained in a previous answer, bond offering is an exclusive limited time offer only. This is due to the fact that bond can be sold out. It depends on demand.
3. Is there a bigger benefit to buy enough fractional bonds to get equivalent to 1 bond (or 10)?
- Overall, no. It is just up to investor how much he wants to invest, since neither investor invest 50 Eur, 100 Eur or 10000 Eur there will be 13% return.2 -
Rahategija Mintos earns from commission fee from bond issuer.
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1) Is there a penalty for late payments?
2) If the bond issuer becomes insolvent or defaults, what kind of steps does Mintos take? Is the recovery process same as with the LOs?1 -
Rahategija, in response to your questions:
1) No. No penalties for late payments at the moment.
2) The Notes Issuer, which is Eleving Group bondholder is subject to the terms and conditions of the Eleving Group prospectus. Should Eleving Group default on its obligations arising out of the issued bonds, the bondholders, including the Notes Issuer, will be subject to the remedies provided in the Eleving Group prospectus. Subject to specific circumstances and some exceptions, in general, there are no specific steps that should be taken by Mintos in case Eleving Group defaults as the bonds’ recovery process will be governed by the terms and conditions of the Eleving Group prospectus. The Notes Issuer will register its claim as Eleving Group bondholder and recovered funds will be transferred to the noteholders in accordance with the terms and conditions of the Notes Prospectus.1 -
Wow !
Just reading the post about the first emission of obligation from eleving.
They will use 20 million to rebuy loan from mintos!
So clearly you have 2 product in concurrency.
IF I had new this first I would have invested more in bonds and reduce my eleving loan portfolio. So now I risk to have diversification problem because my exposure to eleving will probably be reduce because they will rebuy loan and don't have invest enough in bond because I was exposed in loan!!!
So not really happy with this lack of transparency ! And not really happy to finance bonds that serve to buy loans for my portfolio that have probably better return rates !!!!!
Why do you post this afterwards ? Do we have to invest in bonds or in notes ?0 -
Hi Lucja, thank your for your previous response. In addition, can you explain how it works with accrued interest? Is it the same as with loans where it accrues daily and is not part of the sale when put on the secondary market?
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Cyril F, actually Eleving mentioned it in the webinar about the bonds public offering.
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It makes sense that the firm want to reduce THEIR cost of funding above 13% interest.
Eleving group doesn't work for us...
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Rahategija yes I suppose it was written somewhere but hidden inside hundred pages or in a 1hour webinar.
Why the short article with the right statemtn was post afterwards ??
Nicolas Mayer
No problem with Eleving they work for them and I am fine with that ! Just if the strategy was better defined i would have make other choise....0
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