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  • 5% for first 10 years then goes up to 6% for further 2 years should they so wish

    Already up on EQi (nee Selftrade)

    Woz
  • Thanks Woz! A bit surprised by 5% - the charity ones have tended to keep the rate down in the past. My order is in anyway and with the end of the tax year rapidly approaching I suspect this could go quickly. (Shame the new EQi site is a bit 'clunky' for its IPO offers)
  • I am rather concerned by the accounts
  • Hmmm - not sure that 5% is enough for a 10 year bond. Maybe that's the nature of a charity issue??

    And "the trustee wouldn't act for bondholders in the event of default without pre-funding".
  • Hind thanks, please tell us your concerns ( i'm no accountant ! ). On the surface/quick read through looks okish to me but no time yet for thorough read.
  • It seems to me capital is being turned into income. However I may apply for a few because like the work they are doing and think holiday in UK may become more popular
  • Just too risky in the present circumstances (Covid-19), too long dated.
    I have just sold the majority of my undated securities (many Prefs) with the exception of Building Society PIBS.
    Also dislike the optional 2 year extension
    Therefore I be giving this one a miss.

    Keeping a good cash balance, looking for opportunities as they arise, but in no hurry to invest in a falling market!
  • Surely the gardens will be badly hit by COVID-19?, which will cause short term problems. Look at what's happening in Italy.
  • The timing of this bond couldn't come at a worse time and though the coupon rate is attractive the longeivity isn't. Could see this trading at below par fairly quickly after launch that is if it's not pulled earlier.
    The Times ( Tempus ) today have a comment and they suggest there is significant risk so avoid for now and wait and see. Wait for what they didn't elaborate !
  • Decided not to apply for a few
  • I had decided that 5% over 10 years was taking the Michael a bit - OK - they are a charity bond, but...

    What I usually would have done is to buy a load and then sell them in the months after , when ,quite often the price for similar bonds had risen above par, thus making enough to take Mrs Woz out for a couple of decent meals

    However, I started to have doubts if this particular one would make it above par in that time frame, more especially in current climate

    Sussexmade seems to hold a similar view, so that, together with the comments in The Times, has made me to step back and re-think.

    At the moment I think it very highly likely that I will side step from this issue

    Woz
  • I couldn't find any indication of the size of the issue. (I thought I saw a statement that there was no limit, but couldn't find it when I looked again.) This would be useful in order to understand whether the chairty can afford the repayments.

    Looking at this another way, the charity made a surplus of £250k last year (and significantly less in the previous two years). This suggests that it can afford to make interest payments at 5% on £5m worth of bonds. Does it make sense to have such a small issue ? If they issue more than that then they will be in deficit until the proceeds have been put to work and start generating additional revenue.

    Have I missed something ?
  • JGHJGH
    edited March 6
    You refer to "the small issue size" … but I still don't see any mention of the target / maximum amount to be raised.
  • edited March 6
    No more than £20m - p13 of the prospectus. We are in for a few smallish amounts in our SIPPS and ISAs.
  • Thanks, dandigirl - I missed that.
  • edited March 6
    The Charity’s current borrowings consist of a single, unsecured, interest free loan granted by the trustees of the Ninth Duke of Northumberland’s Will Trust, the Tenth Duke of Northumberland’s Referential Settlement and The Duke’s Appointed Fund (the “Northumberland Estates”) on 4 August 2014 in an amount of £8 million, as amended from time to time (the “Northumberland Loan”) and is repayable on 31 March 2047.

    The load is secured by a fixed and floating charge over the assets of the charitable company and by a fixed charge over land and buildings.

    £20m would be bit much, maybe £5m, hopefully investors would put in small orders only

    And if there is a default due to some corona virus non-sense, maybe Jane, Duchess of Northumberland can bale us out, doubt they'll hand over the actual park to us : )
  • edited March 6
    Also, Mark Brassell needs to take a salary cut, 115k is bit much, i mean come on, just for being the front person for the duchess - https://www.google.com/search?q=mark+brassell+alnwick+garden&oq=mark+brassell&aqs=chrome.0.0j69i57.2295j0j7&sourceid=chrome&ie=UTF-8

    How come it went up to 115k from the previous year figure of 77k, is he sleeping with the duchess now : )
  • "Duchess of Northumberland can bale us out, doubt they'll hand over the actual park to us"
    If you are lucky, you may get the park bench!
    Things are not going to look very pretty (Covid-19) over the next few months
    Time to "batten down the hatches", to ride out the forthcoming storm
    If there is a major disruption to world manufacturers then expect inflation to rear its ugly face. Review inflation stats eg during 1939-42

    Ps what is the current market rate for toilet rolls?
  • edited March 7
    My thoughts...please comment or correct

    The question is how secure is the revenue in order to support the interest and eventual capital repayments. And how big will the issue be? I would guess it will be a small issue (max as stated is £20m) with a retained part.

    Balance sheet looks very strong, but no breakdown of tangible assets and capital fund so hard for me to understand, anyone else got a view? Also where does the £8m Northumberland loan appear in the bs?

    Expenditure on charitable activities was 3.9m (2019), 3.7m (2018), 3.6m (2017) from page 34, so surely can they not support the coupon?

    Against the above, 5% for 10 years seems a good deal. In normal times it looks pretty good to me, but then of course we now have the corona panic so will no one go there or how will their visitor numbers be affected? I suspect it was put higher to 5% given the corona scare.

    If you look at the area, trip advisor etc, it seems to be a very well run and top destination and they seem to run it well and have big plans (although yes do agree with argungaur that seems a crazily high salary if correct).

    So is the world going to end and no-one ever go out again? You have to put your money somewhere!

    Also, the bond is senior to the Northumberland loan and none of that £8m can be repaid before this bond (p35 and p43/44), So if its good enough for the Duchess who is getting zero percent and lower down the ranking then would 5% and senior not be good enough for me?
  • edited March 7
    *bail us out

    i'll take the park bench, that's actually the order size i am putting in, haha

    covid-19 is just a blip like mers, ebola and sars etc. we are not going to have an actual war with the bloody nazis like 1939-42

    i would recommend these ones -
    https://www.aldi.co.uk/quilted-toilet-tissue-4-pack/p/071140114619100
    Better quality and price than what u get at Tesco, also try to get the 16 pack for better value for money, they often run out of those though
  • edited March 7
    Financial Statements gives me a pause as well, i hope we are not walking to another NMC and BUR - https://retailcharitybonds.co.uk/wp-content/uploads/2020/02/The-Alnwick-Garden-Trust-2019-signed-accounts.pdf

    Page 7 > The charity has calculated the net present value of the 8m loan to be 3,2719,265

    Page 33 > Creditors: amounts falling due after more than one year

    They can cut the charitable activities to support the coupon but they can also instead choose to default and use the duchess and the public support to screw the private investors

    Page 30 > The total employee benefits of the key management personnel of the charity were 114,590 (2018: 77,522)

    So while the bond is senior to the Northumberland loan, you are def junior to the duchess when it comes to mark defaulting on the bond in order to suck up to duchess, i mean come on, that's why duchess jacked up his salary from 77k to 115k over just a year, mark is now in the pocket of the duchess and will do as told, and i suspect duchess has got more money than pdepp, so she wouldn't mind the charity defaulting on both the bond and the Northumberland loan as long as the duchess wishes are met for the park
  • Looking at it further and thank you for the accounts Arjungaur, it seems a very strong balance sheet. Given gilt yields, 5% for 10 years, given the balance sheet is not at all bad.

    Given the size of the operation, the salary to the Chief Executive is proportionate.

    Why the comment 'but they can also instead choose to default and use the duchess and the public support to screw the private investors'? In the case of default the retail bond is senior to the Northumberland loan.

    To my mind the issue here is the current climate but this will eventually pass and people will go out again.

    However, there does not seem to be much interest here...
  • Pdepp, It's not just looking at the Alnwick Garden Trust which may concern me, it's the global economic situation, with world tourism being dramatically cut the next year or two, possibly longer. The service industry is so much bigger than manufacturing in the UK, than a few years ago. A good proportion of family expenditure is discretionary, which can be switched off like a switch on a light. Many people will be wondering how they going to get to work (& holidays if not already cancelled) and back safely over the next few weeks.
    The good thing about the Garden Trust, it's an outdoor activity, with less chance of catching a virus (but avoiding the tea rooms). Many will require quiet outdoor activities at this period of stress.
    "Eventually pass" - I think the UK Government has already indicated that 1 in 5 people may be infected at any period of time, thus containment is not going to happen. Thus the possibility that once we all have been infected, we may get back to normal.
    See https://www.bbc.co.uk/news/uk-51718917

    Investors need to review their portfolios, a nasty depression may be starting, thus reducing the values of many asset classes, including property.
  • I have already applied for this. The Covid 19 virus has had no effect on charity bond prices and they are all the more attractive as shares are currently unattractive. The charity will get a £5m grant from the Department of Communities and Local Government provided they can raise £10m to develop a garden play village "Lilldorei". It is not as outstanding as Bruntwood but it is satisfactory for my purposes and I like the long term. There is a point about charity accounts you need to understand. If you have a charity that has a surplus of £100,000 every year, and then they get a £10m donation to spend on a project over the next two years, that does not mean they have a loss for the next two years of £4.9m. You have to understand the difference between the various funds.
  • edited March 8
    Given the size of the operation, the salary to the Chief Executive is proportionate > Is there some scientific ratio for this >>

    Why the comment 'but they can also instead choose to default and use the duchess and the public support to screw the private investors'? In the case of default the retail bond is senior to the Northumberland loan > So while the bond is senior to the Northumberland loan, you are def junior to the duchess when it comes to mark defaulting on the bond in order to suck up to duchess, i mean come on, that's why duchess jacked up his salary from 77k to 115k over just a year, mark is now in the pocket of the duchess and will do as told, and i suspect duchess has got more money than pdepp, so she wouldn't mind the charity defaulting on both the bond and the Northumberland loan as long as the duchess wishes are met for the park
  • edited March 8
    Investors need to review their portfolios, a nasty depression may be starting, thus reducing the values of many asset classes, including property. > You really can't predict future price action based on your expectations of unfolding events, pls look through other people's eyes, watch their votes and come to reasonable subjective evaluation of what they are able to see that you alone are not able to see.

    And because our need to be right can be more important than our need to find out what's true, we like to believe our own opinions without properly stress-testing them. We especially don't like to look at our mistakes and weaknesses. We are instinctively prone to react to explorations of them as though they're attacks. We get angry, even though it would be more logical for us to be open to feedback from others. This leads to our making inferior decisions, learning less, and falling short of our potentials - https://www.principles.com/principles-for-success
  • With these growth rates and recovery rates, it's safe to say crisis over, i'm just waiting for next crisis to come along for us to fixate on, it was the same story with Soleimani where everyone was worried about that but now everyone has forgotten about it once some new shiny toy came along for our ego -

    https://en.wikipedia.org/wiki/Template:2019–20_coronavirus_outbreak_data/China_medical_cases_chart
    https://en.wikipedia.org/wiki/Template:2019–20_coronavirus_outbreak_data
  • Todays Mail On Sunday ( Midas-Joanne Hart ) is quite bullish on this issue. The longevity for me is still the stumbling block so might just consider a smallish punt with a short term view of say 2-3 years and maybe top up a little if the price drops below par. Like many here I have maturing bonds etc. and need to invest somewhere.
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