Under the Stability Option, the investment in UK Government Bonds has a high credit rating but is expected to provide only 0% annualised return once management fees are paid.
The separate opportunity option investment made under the Education Bond® Programme is made into the special lending company (known as a ‘Lendco’) which is targeted to provide a considerably higher net annualised return of 4% or £40,000 after management fees.
The Lendco will provide loans to ﬁnance the construction of UK property at market rates, usually over a 6-18 month period, in order to deliver this target return of 4%, whilst still maintaining the security of the Bondholders’ capital. Projects will cover a broad spectrum of asset-backed investment projects but will favour UK Government priority sectors
such as student, key-worker accommodation and other ‘aﬀordable housing’ initiatives. Other secured loan opportunities may be considered. All loans are secured on property or other assets within deﬁned loan-to-value and debt-servicing parameters. Loans are made on the advice of an appointed lending strategy advisor - Education Bond Advisors Limited (EBAL),
who has the capacity to commit Bondholders’ capital to a transaction. At all times, invested funds are managed by a professional administrator. Their role is to help collect information on the performance of the loan portfolio and income from the investment, manage interest payments and payment of tuition fees.