The latest review of security cover for REAL Bondholders – comparing the value of bonds against the value of property security – shows an average loan-to-value ratio of below 25%. A figure below 50% implies that sufficient returns would be generated to redeem Bondholders’ investments even if property values were to slump by half. REAL director Alan Bate comments, “The current low loan-to-value level reflects our increased focus on well-secured first-charge lending. Whilst some individual loan arrangements including [...]
Today's Monetary Policy Committee decision to increase base rate from 0.5% to 0.75% pa brings nearer the prospect of higher returns for investors in REAL Monthly Income Bonds. Interest on these bonds, currently 5% pa AER, will rise while base rate exceeds 0.75% pa. For example if the next MPC change leads to a 1% base rate, monthly bond interest will increase to 5.4% pa.
Two fresh bond series are launched today, with higher interest rates across the board and more frequent monthly interest payments. Here are the headlines: REAL Monthly Income Bonds (Series 7) - 5 year term - Penalty-free redemption available after thirty months - 4.90% pa gross interest payable on the last working day each month (5.00% AER) - Tracks Bank of England base rate between 0.75% and 5.0%, plus 4.4% - Secured on UK property Compared with the previous series of Income Bonds we have increased [...]
Two new loans since November are keeping bondholders' investments in profitable use. One is financing a residential redevelopment nearing completion in Tonbridge, the other relates to the conversion of a former Surrey nursing home into modern studio flats. Both loans are secured by first charges over the properties. Meanwhile a previous loan has reached maturity and the borrower has repaid the advance, with full interest. Taking account of these recent changes to the loan book, the loan-to-value ratio reveals that [...]