Asset Backed Bonds

BMO Financial is currently offering investors the chance to invest into an asset backed property bond that comes with the added option of being protected by a Capital Protection Scheme that will fully protect investors capital. The starting level for investors is £10,000 and there is no upper limit.

Investors have the choice of two separate bonds a three year and a five year option.

The Three year bond has a fixed annual return starting at 7.5% rising to 8.0% for investments above £100,000. This bond also has an early exit option where investors can exit early once every year.

The five year bond offers superior returns starting at 8.5% rising to 9.0% for investments above £100,000. Due to the higher coupon rate, there is no early exit option on the five year bond.

Both bonds have a compound option, where you can defer interest until the end of the term. This option generates greater returns, for clients who are seeking capital growth. There is a further option for high net worth and sophisticated investors to gain an even better coupon should they decide to forgo the protection given by the Capital Protection Scheme.

This Asset Backed Bond is administered by the BMO Financial Guaranteed Property Fund which uses bondholders funds to increase leverage for the funds shareholders.

Security

The BMO Financial Property Bond offers two key areas of security. Firstly, the bond is asset backed. This means that investors have a legal charge against the assets bought by the Fund. This means that in the event of default, bondholder capital is paid back before shareholders. This process is overseen by an Independent Security Trustee.

A Capital Protection Scheme is an additional level of protection. This policy undertakes to pay investors in full should the assets of the Fund be insufficient to pay back bondholder holders. This scheme has been put in place with a top tier insurance company that holds a very strong credit rating from the major rating agencies.

All acquisitions are handled by the Project Committee who have many years of experience in the property sector. They will only approve projects that meet their strict eligibility criteria.