Covered Bonds - Short Term Investment with Interest Payout more than FD,PPF.

 

Covered Bonds

Invest in High Yield Debt Assets Like Never Before

Covered bonds offering 9-11% fixed returns

Minimum investment from ~₹10k

SEBI regulated assets which are listed on BSE

Demat Account is must.

Current Investment Opportunity

Website: https://www.wintwealth.com/

Upcoming Covered Bonds (June 18th)

 

Previous Covered Bond

TAXATION

Investors

So what are covered bonds?

Let's first understand bonds!

When you invest in bonds, you lend money to NBFC. If it is a secured bond, NBFC keeps an exclusive pool of loans as security to this bond.

The problem is if the NBFC goes bankrupt, even if you have an exclusive pool of loans, your money is stuck in the moratorium process.

What is that process? In short, a process in which all the lenders figure out how to recover their money. Every lender wants to withdraw money first, and that creates all the problems. The process can go on for years!

e.g., DHFL secured bondholders haven’t still gotten money back(it’s been more than a year)

At Wint Wealth(Previously GrowFix), we have a simple investment philosophy.

1. Build products that give fixed/ steady returns.
2. Build products that are secured by physical collateral like gold, real estate, or vehicles.
3. Build products that are bankruptcy protected.

That means we would never bring you a product where your money would be stuck if NBFC went bankrupt.

There comes Covered Bond.

It is a bond that is bankruptcy protected. How?

Let me explain this with an example of our next product:

Our next product is a covered bond of ₹ 10 Cr. Rather than just giving an exclusive pool of gold loans worth ₹ 12 Cr as security, the NBFC goes one step further. It sells that pool to a special purpose vehicle(SPV) only created to hold those loans.

After, let’s say, one month, out of the 12 Cr initial loans pool, 1 Cr is paid back by borrowers, NBFC will give new gold loans of 1 Cr to the SPV.

So, SPV and the investors will have a 12 Cr loan pool for a 10 Cr Covered Bond at any point in time.

Note that the SPV and investors are legal owners of those pools of loans. Even if the NBFC goes bankrupt, the repayments from borrowers flow to the SPV and investors.

At the maturity date, the NBFC will pay back the whole amount and take back the loans from the SPV.

In a nutshell, the Covered bond is bankruptcy-protected, and it would be one of the many instruments that we will bring to our investors at Wint Wealth(Previously GrowFix).

To more about Risk covered: https://twitter.com/WintWealth/status/1402140661021827074?s=08

FAQ: https://www.wintwealth.com/faq/

Source: https://wintwealth.medium.com/covered-bonds-4c7bb60c845e

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