The Telegraph reports that some high-interest bonds based on renewables subsidies are failing as subsidies are reduced:
‘Investors who bought a bond promising annual returns of 7.5pc from renewable energy company Wind Prospect Group face a three year wait to have their capital returned.
‘The “mini-bonds”, called ReBonds, were issued by the company in 2011 and were due to pay the annual interest before investors were able to request their capital back last year. But bondholders have been in limbo since the summer when interest payments and redemption requests were suspended.
‘At the time the firm said there would be a “three month moratorium” but, as Telegraph Money reported in January, six months later and interest and capital remains unpaid.
‘In an update to investors, seen by Telegraph Money, the firm said it will take three years for all bonds to be redeemed under a restructuring plan.
‘Interest payments, both future payments and those that are overdue, will be serviced, the company said.
[…]’. [1]And:
‘Investors in a “mini-bond” – a new type of investment that often pays attractive interest rates – risk losing some or all of their money after interest payments ceased.
‘The bonds, issued in 2013 by Secured Energy Bonds, a subsidiary of an Australian firm called CBD Energy, promised to pay 6.5pc interest for three years.
‘But both CBD Energy, which specialised in renewable sources such as solar power, and Secured Energy Bonds have gone bust and investors in the mini-bond said they had not received an interest payment due on January 26.
‘A British company, Independent Portfolio Managers (IPM), was involved in issuing the bonds and appointed as a “security trustee” of Secured Energy Bonds in a move designed to safeguard investors’ interests. IPM said the bonds were “secured” against the assets of the energy company, meaning that investors should have some protection in the event of insolvency.
‘However, it is not clear at this stage if bondholders will receive any of their money back and there have been reports that Secured Energy Bonds’ money was diverted to the parent company as its own problems intensified.
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