Bonds known as converter bonds have the option to be converted, at a predefined conversion ratio, into shares of the issuing company.
In this review, we take a closer look at the 9Mountains bonds and see what the converter bonds offering is all about.
It can be a way to diversify your portfolio, but it’s a high-risk investment that needs attentive scrutiny and expert guidance or advice.
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Some facts might change from the time of writing. Nothing written here is financial, legal, tax, or any kind of individual advice or a solicitation to invest.
Bear in mind that loan notes or bond investments carry significant risks as they can default and you could lose all your money.
9Mountains Bonds Overview
First, a bit of background.
Investors were given early access to a strategic asset acquisition scheme through Peninsula Accumulator Trust’s exclusive pre-funding asset purchase program.
Those looking to diversify their portfolios or get exposure to particular industries or assets before they become widely accessible may find such an offer appealing.
In the first instance, the firm said investments will be listed on Luxembourg Fund Platforms and could eventually be listed on the Luxembourg Stock Exchange, which would increase market liquidity and visibility.
Only a limited number of investors are allowed to participate, usually those who already have ties to the Peninsula Accumulator Trust or who meet specific financial requirements.
The investment product is made available through the 9M Converter Bonds.
9M Converter Bonds 60-Day Ultra Short-Term Bonds
The 9Mountains bonds may be convertible into other securities, subject to certain conditions.
They have a 60-day maturity, making them extremely short-term. That means faster returns with comparatively less exposure to long-term risks.
Throughout its duration, the bond offers multiple interest payments, as indicated by the multi-coupon liquidity product feature. Because of this, investors can profit from their investment on a regular basis.
Investors are being offered an effective overall interest rate of 8.25%. Given that the return is comparatively high for short-term bonds, investing in them is quite risky.
9M Converter Bonds 160-Day Short-Term Bonds Series I
This provides an additional enhancement coupon and a 12% effective interest rate, making it a high-yield investment opportunity.
The bonds have a term of 160 days, so investors can expect returns with relative speed.
At maturity, investors can choose to convert their principal into class-X shares of the Manhattan Sea Floor Mining Development Fund thanks to the bond’s unique conversion feature.
This conversion comes with a substantial 85% discount. This could deliver significant upside if the shares’ worth increases.
But there are also sector-specific risks associated with the mining project’s performance.
The cost of commodities, geopolitical events, environmental issues, and technological advancements can all have a big impact on the mining industry.
Since these investments are private, invitation-only offerings, only a limited number of eligible investors can access them. Usually, you’ll need an advisor to invest in them.
These products are less liquid and riskier than traditional investment products, so getting professional help in investing in such type of offering or a similar one is strongly recommended.
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