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The lifecycle of a bond

Bonds are one of the simplest ways in which an investor can earn interest on their capital; yet many who are accustomed to other products, such as peer-to-peer lending, are unaware of just how simple the process is.

In addition to the many benefits of investing in bonds – such as fixed rates of interest which offer investors forecastable regular payments or the additional comfort that comes with investing in a product listed on a regulated stock exchange – many investors are often surprised to discover the ease in which this process can now be accessed and managed online.

It’s due to this newfound simplicity of investing in a traditional product that at Wellesley we believe that the future of investments into bonds is bright.

While managing investments online is nothing new, there are a few nuances that differentiate the process of investing in bonds versus other investment products. So, to help explain the end-to-end journey for investors in bonds, below we’ve explained the lifecycle of a Wellesley bond.

  1. Wellesley opens the bond
    • Wellesley sets and publishes new rates for the bond and the bond opens on Wellesley’s online investment platform. Rates can go up or down or remain the same as the previous bond’s rates. The rate published at this stage will never change; this is the rate of interest that investors will receive each month for the duration of the investment.
    • Wellesley bonds are typically open for a month, but customers should always check the submission deadline detailed on the bond’s page of the website. Click here to be taken to our open bond, The Wellesley Property Bond.
  2. Investors subscribe funds
    • Once a bond is open, customers can subscribe to a bond. A subscription is essentially an instruction from a customer to Wellesley to request that their funds are moved to the bond when it lists.
    • Investors are free to commit funds into a bond without sufficient funds in their holding account, however they must ensure enough funds have been moved into their cash holding account before the bond’s closing date. If there are not sufficient funds in a client’s cash holding account at this time, Wellesley will be unable to process the subscription and investors will have missed out on the opportunity to invest in that series of the bond. If you wish to check what funds you have in your holding account, please check the Available Balance as listed in the Holding page of your account.
    • Client’s will be able to see their subscription into the bond under the Recent Activity page of their account. However, account balances will not update until the bond is issued and listed on the stock exchange. If you wish to check what funds you have committed to a bond before it lists, please check the Recent Activity page on your account. It will appear here under the Pending Orders tab.
    • Funds only earn interest once a bond is issued (listed). This is as funds are still held in a client holding account – not the bond – up to this point.
  3. Wellesley closes the bond
    • The bond is then closed and taken off the Wellesley online investment platform. At this point customers can no longer subscribe funds to it, however a new bond with new rates will be opened immediately after.
    • The process of listing a bond is then triggered and typically takes four working days. This process involves a series of approvals regarding the final terms of issuance between Wellesley, GRM Law (Wellesley’s legal counsel) and Euronext Dublin . This process is rigorous and is to ensure that the bond adheres to the high standards set by the stock exchange and its regulations.
    • Investors’ account balances will not update during this period. This will only happen when the bond lists
  4. Wellesley lists the bond
    • This is when the transaction on making the bond live occurs and funds are moved from the client cash holding account into the bond.
    • Investors start earning interest from this day.
    • Once this transaction occurs, the Available Balance on a customer’s online account will update to reflect their investment. Their new holding will also appear in the relevant drop down on the Holdings page of their online account.
  5. Investors earn interest
    • Interest is paid into an investor’s cash holding account on the monthly anniversary of the bond’s listing date. This is also where full capital is paid on maturity. This will appear in an Available Balance at which point the customer can withdraw or reinvest as they wish.

 

Innovation built on traditional values: Invest The Wellesley Way.

 

Bear in mind

  • The Wellesley Property Bond has a fixed rate and duration.
  • The Wellesley Property Bond is an ISA eligible investment, allowing you to earn tax-free interest on your investment. Please note, tax allowances and the tax efficient benefit of ISAs could change in the future.
  • As Wellesley Secured Finance Plc  is responsible for issuing bond notes which is a non-regulated activity, it is not authorised or regulated by the FCA.
  • As Wellesley & Co. is responsible for arranging deals in investments via the online investment platform which is a regulated activity, it is authorised and regulated by the FCA (FRN 631197).

Your capital is at risk and interest payments are not guaranteed. Investment in the Wellesley Property Bond is not covered by the Financial Services Compensation Scheme (FSCS). In the event of a loan default or if Wellesley Secured Finance Plc becomes insolvent, you may lose some or all of your investment, including interest payments due. If you are in any doubt about making an investment you are strongly recommended to consult a trained professional financial advisor. Before you subscribe to the Wellesley Property Bond you should ensure that you fully understand the risks and determine whether the investment is suitable for you on the basis of all the information available, including the Wellesley Property Bond prospectus.

Wellesley is the singular name for the following collective of companies, Wellesley Group Limited (09811856), Wellesley & Co Limited (07981279) and Wellesley Finance Plc (08331511). Wellesley Secured Finance Plc was established as a special purpose vehicle for the sole purpose of issuing asset backed securities and is not part of Wellesley Group.

The information contained in this website has been approved as a financial promotion for UK publication by Wellesley & Co Limited (FRN 631197) who is authorised and regulated by the Financial Conduct Authority (FCA). 

Wellesley & Co Limited and Wellesley Finance Plc are registered in England and Wales and their registered office and trading address is at St Albans House, 57/59 Haymarket, London SW1Y 4QX. The registered address for Wellesley Secured Finance Plc is 1 Bartholomew Lane, London, EC2N 2AX..

 

Require further information?
Call our customer service team on 0800 888 6001 or e-mail us on [email protected]